Baidu
shares dropped following a report that its artificial-intelligence chatbot had been tested by scientists affiliated with the Chinese military. The internet company distanced itself from the research in a sign of the political challenges facing Chinese AI companies.
Baidu’s
American depositary receipts were down 4.2% in premarket trading on Tuesday at $104.40. That added to a 7% fall last Friday after the South China Morning Post reported that a laboratory affiliated with the People’s Liberation Army’s Strategic Support Force —which oversees cyberwarfare— had tested its own AI system on Baidu’s Ernie Bot.
The likely explanation for the fall is that investors fear any association of Baidu’s AI efforts with the Chinese military could risk attracting U.S. sanctions. The company denied any links with the laboratory.
“The authors built prompts and received responses from LLMs [large language models], using the functions available to any user interacting with generative AI tools. Baidu has not engaged in any business collaboration or provided any tailored service to authors of the academic paper or any institutions with which they are affiliated,” Baidu said in a statement on Monday.
Macquarie analyst Elle Jiang wrote in a research note that market fears looked to be overdone, with no evidence of integration between Baidu’s AI and the military. She kept a $150 target price on Baidu ADRs.
Baidu is best known for its search engine, but is now seeking to become China’s leading AI company. It said last month that Ernie Bot, a Chinese-language alternative to ChatGPT, had more than 100 million users. It was one of the Chinese companies whose orders of AI chips from
Nvidia
were left in limbo by U.S. restrictions on exports to China, according to The Wall Street Journal.
The competition in China’s AI sector is fierce, with internet giants
Alibaba
and
Tencent
also launching their own AI models last year.
Write to Adam Clark at [email protected]
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