Chinese tech giant launches ChatGPT-style tool, sending shares soaring

One of the world's biggest AI (artificial intelligence) and internet firms, Baidu, had its shares skyrocket more than 14 percent on Tuesday after the Beijing-based search engine titan announced it would launch its own ChatGPT-style service. 

The company's "ERNIE Bot" AI chatbot, also known as "Wenxin Yiyan" in Chinese, will complete internal testing and launch in March. Much excitement has developed towards what may be China's most notable entry in the race to create lifelike AI bots. 

What is ERNIE?

ERNIE, which stands for "Enhanced Representation through Knowledge Integration," is based on a language model Baidu (BIDU) first developed in 2019, a spokesperson told CNN. The news comes after years of work by Baidu to shift from online marketing to more advanced technologies, which has cost the company billions of dollars in research into AI.

According to Daniel Ives, managing director of Wedbush Securities, the company's expenditures in AI might be considered "both an aggressive and defensive strategic move in China."  

"Chinese Big Tech is battling in this AI race, with Baidu [being] a key player," he added. 

Language models work by being trained on enormous amounts of web data to produce convincing responses to user prompts. In Ernie's case, it has been trained on data over several years. 

The ERNIE project is now the third revision. It can compose essays and poetry or use text prompts to produce graphics for its users automatically. 

According to a report by Bloomberg, Baidu intends to incorporate ERNIE first into its primary search service. Users of the program will be able to obtain search results in a conversational format, similar to the renowned OpenAI platform.

What is the global AI chatbot race?

And that's not all. Beyond Baidu's entry into the hotly contested generative AI space, other Chinese AI-related equities, including Beijing Deep Glint Technology Co. and Cloudwalk Technology Co., have seen a recent rise. 

The trend reflects growing investor interest ever since San Francisco-based Open AI launched ChatGPT in November last year. 

Since then, the AI bot has gained enormous popularity, gaining millions of users in a matter of days thanks to its cutting-edge conversational AI technologies. ChatGPT has also earned eye-popping investments from Microsoft Corp. 

The business began promoting a $20 monthly premium version to subscribers last week. Known as ChatGPT plus, it has features like access during peak hours and quicker response times.

Whether Baidu will charge its users for ERNIE's services remains unclear. 

Baidu's news also comes after Google revealed on Monday that it would introduce a new chatbot tool called "Bard" in an apparent effort to counter ChatGPT's success in becoming a viral hit.