Baidu shares plunge after disappointing AI chatbot debut

Shares in Chinese search engine Baidu fell 10 percent on Thursday after the company unveiled its ChatGPT-like artificial intelligence software, and investors were unimpressed by the bot’s display of linguistic and math skills.

The AI-powered ChatGPT, built by San Francisco-based company OpenAI, has made waves with its ability to write essays, poetry, or code on demand in seconds, fueling widespread fears of fraud or outdated professions.

Chinese tech giants have joined the global rush to develop competing software, with Alibaba and also announcing similar projects.

But Baidu’s Ernie Bot, unveiled at a press conference in Beijing on Thursday, fell short of expectations, with company co-founder Robin Li showing only a pre-recorded demo of the software’s capabilities, not a live interaction.

The company showed the audience a screen recording of the bot answering questions about the popular Chinese sci-fi novel The Three-Body Challenge and compiling a plot summary.

He also demonstrated Ernie Both’s algebra skills and generated sound in Sichuan Chinese and Hakka.

Baidu’s Hong Kong-listed shares tumbled immediately after the software was unveiled, dropping more than 10 percent at one point.

The company’s shares recovered slightly after that, dropping about 7 percent on Thursday afternoon.

Baidu says it intends to integrate the bot into its search engine as well as its smart home devices with “real world applications across industries.”

But China’s strict censorship and U.S. restrictions on the sale of chips could curtail AI ambitions of Baidu and other Chinese companies.

ChatGPT is blocked in China, but US software is gaining a base of Chinese users who are using VPNs to get around the ban, deploying it for essay writing and exam cramming.