Baidu shares drop to 8-week lows after company reveals ChatGPT rival

BEIJING — Chinese tech company Baidu on Thursday gave the public a peek at what its Chinese-language ChatGPT alternative can do, while warning of its imperfections.

During a livestreamed release event, Baidu CEO Robin Li emphasized the company’s product — called Ernie bot — is not perfect. Shares fell nearly 6.4% in Hong Kong, amid a wider fall for Asian stocks, and posted their lowest close since Jan. 19.

Li emphasized how the product would improve through users’ ability to give it feedback.

Baidu is prioritizing initial Ernie bot access for what it calls 650 ecosystem business partners, which include some media companies, banks and car firms. Baidu has a large enterprise cloud business and said that users of its AI cloud could apply for access to Ernie bot’s application programming interface.

Within an hour of the Ernie bot announcement, Baidu said 30,000 corporate clients had joined the waitlist for access to the chatbot. CNBC, other media and the mass public did not immediately receive access.

Microsoft-backed OpenAI this week announced GPT-4, the latest version of the artificial intelligence tech behind its highly popular ChatGPT chatbot. The bot was initially released to the public for free in November, and individuals wanting to access GPT-4 capabilities need to pay $20 a month.

ChatGPT is able to converse in a human-like way and generate everything from content summaries to business proposals.

While ChatGPT is free to anyone who can set up an account, people had to join a waitlist to try Microsoft’s Bing AI chatbot — which uses OpenAI tech — that launched last month. Some users reported a creepy experience.

Baidu’s Li said Ernie bot had similar issues if used enough, and that it wasn’t perfect. But he noted the model is trained on a set of 550 billion facts.

The AI isn’t meant to highlight rivalry between the U.S. and China, but the result of Baidu’s efforts to “change the world with technology,” Li said in Mandarin, translated by CNBC.

Baidu’s Hong Kong-traded shares are still up 12% for the year so far.

Microsoft shares are up by about 11% for the year so far, while Google parent Alphabet’s Class A shares are up nearly 9%.

ChatGPT has caught local interest in China, despite not being officially available in the country. ChatGPT does have a Chinese-language function, although not at the same level as in English.

Beijing has pushed for national self-sufficiency in tech, while maintaining censorship and increasing regulation of data.

Many Chinese companies, other than Baidu, are developing similar tech.

In February, Baidu’s Li told analysts on an earnings call the company would first embed its version — Ernie bot — into the company’s search engine and open the product to the public in March.

Li said the company also planned to use the AI tech for content creation. Baidu backs one of China’s major video streaming platforms, iQiyi.

It was not immediately clear how Baidu’s Ernie bot and AI capabilities compare with ChatGPT’s.

OpenAI said this week its GPT-4 can beat 90% of humans on the SAT, a college admissions exam in the U.S.