Baidu stock recovers from ChatGPT-style bot demo 2023
The day after ERNIE Bot, Baidu’s reaction to the ChatGPT frenzy, was introduced, shares of the Chinese search engine soared.
Its stock rose 14.3% in Hong Kong on Friday, making it the largest gainer on the Hang Seng Index (HSI). They also gained 3.8% in New York on Thursday during US trading.
A day before, Baidu (BIDU) was the index’s largest decliner. After a public presentation of its bot failed to satisfy investors, the company’s Hong Kong shares decreased by 6.4%. More than 650 firms have joined the ERNIE ecosystem since February, CEO Robin Li stated during the presentation.
Within two hours after its demonstration, the startup reported that more than 30,000 organizations had signed up to test its chatbot service.
Esme Pau, head of China and Hong Kong internet and digital assets at Macquarie, told CNN, “We expect Baidu will continue to capture China’s industry demand for generative AI, given the strong level of enterprise interest.”
She said that the company’s stock rose on Friday as some users, including analysts, offered favorable comments about their personal experiences with ERNIE, indicating that the bot possessed more sophisticated skills.
During the presentation, Baidu demonstrated how its chatbot could create a company newsletter, establish a brand tagline, and solve a math puzzle.
According to Pau, the company’s price fell on Thursday because the demo was pre-recorded and not live, causing investors to doubt the resilience of the ERNIE Bot.
She stated that Baidu’s presentation occurred just days after the debut of GPT-4, which “increased the bar for ERNIE.”
GPT-4 is the most recent version of ChatGPT’s artificial intelligence technology. Last week, the service astonished customers with its ability to simplify code, fast develop a website from a basic sketch, and earn high grades on examinations.
Argus reported that Baidu’s shares were already “modestly down” before to showcasing its software on Thursday, illustrating the pressure from investors who had higher expectations following the announcement of GPT-4.
“ERNIE lacks the [same] multilingual capabilities as GPT-4, and English inquiries have yet to develop,” she noted. In addition, the ERNIE launch lacked appropriate quantitative indicators in comparison to the GPT-4 launch earlier this week.
Similar to ChatGPT, ERNIE is built on a linguistic model that is trained on enormous amounts of web data to provide engaging replies to user queries.
Li stated that Baidu’s hopes for ERNIE were comparable to ChatGPT or perhaps GPT-4.
Nonetheless, he admitted that the program was “not yet flawless” and that it was being released to corporate users first. The service is not yet offered to the general public.
Competition is intensifying
Last month, Baidu introduced its chatbot. According to some detractors, the service would exacerbate the existing US-China competition in new technology.
During the debut, Li attempted to dispel this analogy by stating that the bot “is not an instrument for the conflict between China and the United States in science and technology, but rather a product of decades of Baidu technicians following the ideal of transforming the world via technology.”
“It is a brand-new platform for us to empower dozens of sectors and service hundreds of millions of people,” he added.
Baidu asserts that its service is distinguished by its sophisticated understanding of Chinese searches and its ability to provide various sorts of answers.
The business stated in a statement that ERNIE Bot is capable of producing text, graphics, audio, and video in response to a text command, as well as delivering speech in many local dialects, including the Sichuan dialect.
According to its developer, OpenAI, GPT-4 can also evaluate images but only creates text replies at the moment.
Baidu is not the only Chinese company developing this technology. Alibaba (BABA) revealed intentions to build a platform similar to ChatGPT last month, joining the ranks of IT heavyweights hopping on the chatbot bandwagon.
According to observers, Baidu has a first-mover advantage in the Chinese market.
According to Pau, ERNIE is three to six months ahead of its possible competitors.