Update: Baidu shares rebounded as it recovers from chatbot demo woes

Stocks of Baidu, China’s leading search engine and AI firm who’s behind the newly launched ERNIE Bot, rebounded today after dropping to an 8-week low yesterday. Baidu soared 14.3% in Hong Kong, and 3.8% in New York today.

Baidu stocks tanked as much as 10% at one point in Hong Kong yesterday, and eventually pared losses to 6.4%. The loss attributes to Baidu’s recent product launch, “ERNIE Bot”, a GPT-like pertained large language model specializing in its Chinese abilities.

ERNIE Bot came out shortly after the launch of GPT-4, the latest version of AI model behind ChatGPT, capable of coding and other advanced tasks. GPT-4 rode on the AI hype raised expectations for AI chatbots.

Baidu shareholders were disappointed by Baidu’s ERNIE Bot demo, which was pre-recorded. People were also disappointed that ERNIE Bot is not open to the public yet.

The rebound today can be attributed to the market’s optimism about AI’s future, especially after selected people with invitation codes such as industry experts and media shared their experiences with ERNIE Bot.

For example, Chinese tech media Chapingjun posted their conversation with ERNIE Bot and New Bing on Weibo, a Twitter-like platform. According to Chapingjun’s posts, ERNIE Bot is capable of code writing, graph drawing, image generation, but does contain factual errors in its responses.

When asked about the stock fluctuation of Baidu, ERNIE Bot said Baidu’s AI technology is seen as a major breakthrough for the company, as the company’s current core businesses – search engine and internet advertising – are suffering from “the gradual disappearance of internet traffic dividends”, and the drop was due to “a divergence in the market’s view on its prospects, as some investors believed that it did not meet market expectations,” while the rise was due to “the development prospects of artificial intelligence and conversational AI products are still broad, so investors remain optimistic about Baidu’s future development, and the stock price has rebounded.” (The above response is an excerpt of conversation between ERNIE Bot and YiCai, a finance and economy media in China, and translated by PingWest.)

The rebound not only suggest the general public’s optimism with Baidu, but also optimism with AI’s rise in China, which is on par with the country’s stance on the technology.

On February 24th, at a press conference, Chen Jiachang, director of the Department of High and New Technology of the Ministry of Science and Technology, said that AI, as a strategic emerging technology, has increasingly become a key driving force for technological innovation, upgrading industries and increasing productivity. Chen added that China has attached great importance to the development and governance of AI technologies.