Commentary
Chinese internet giants Baidu and Alibaba have joined the global artificial intelligence chat bot arms race.
And yet, in a string of events eerily similar to 2020’s, Chinese state media quickly offered a stinging rebuke.
Let’s set the stage first. The recent release of the latest version of OpenAI’s ChatGPT chat bot has brought a renewed emphasis on artificial intelligence (AI) and machine learning. ChatGPT is able to write essays, do research, and pass occupational tests, all of which have both stoked fear and whipped up a frenzy on the business potential of this technology.
Two of the companies at the forefront of this technology are Microsoft and Alphabet. Microsoft already has a multibillion-dollar investment and partnership with OpenAI, the entity behind ChatGPT. Microsoft announced that it would integrate a version of the chat bot into its internet search engine Bing and web browser Edge.
Alphabet, the parent company of Google, has its own AI chat bot called Bard, built on the company’s LaMDA platform. It works a bit differently from ChatGPT but has its own merits.
The frenzy over AI chat bots has boosted the stock of both companies recently. And not to be outdone, at Apple’s third-quarter earnings call, CEO Tim Cook announced that AI is also a priority for Apple, which has the benefit of data gathered from the most popular smartphone in the world.
A MarketWatch analysis of earnings call transcript data found that so far this year there have been 466 total mentions of AI, underscoring the desire for management teams to broadcast that their firms are focused on this area. In other words, AI has become the blockchain of 2023.
Back to China’s technology firms. The day after Google announced Bard, Chinese internet giant Baidu unveiled that it is working on its own AI chat bot, called Ernie. The platform has been under development for four years and will be ready for trial in March.
In 2021, Baidu announced ERNIE 3.0 Titan, an AI language model based on 260 billion parameters. That’s a bigger set of parameters than the database underpinning ChatGPT.
Merely a few days later, Chinese e-commerce giant Alibaba announced that it was putting a similar AI chat bot type of service under testing. Alibaba also has a nickname for its AI language model: DAMO (Discovery, Adventure, Momentum, and Outlook).
Chinese online retail giant JD.com also got into the fray. On the company’s Weixin account, JD announced ChatJD, an industrial chat bot dedicated to the fields of “retail and finance,” in a seemingly flagrant bid to hype up its core business and stock price at once.
The AI arms race of 2022–2023 seems to be underway, and investors are contributing to this frenzy, sending shares of both Baidu and Alibaba higher immediately after their announcements.
This all causes some déjà vu for those who remember when traditional imaging firm Eastman Kodak and a beverage company known as Long Island Iced Tea very publicly announced pivots toward blockchain and crypto, sending their share prices momentarily upward.
As for the Chinese upstarts, the party might be over before it begins.
The Securities Times, a state-owned financial industry newspaper, published a stern editorial warning investors not to be lured by speculation of “false concepts” and ultimately losing out by blindly following popular trends. The editorial was directed at AI and chat bots such as ChatGPT specifically.
Such warnings from Chinese state-owned media likely shouldn’t be trifled with. The technology sector crackdown of 2020 and 2021 was preceded by a string of government media editorials warning against tech speculation and unchecked expansion.
With that said, the Chinese Communist Party (CCP) likely is interested only in slowing down the rollout of such services. When Baidu initially announced years ago that it was working on an AI initiative, it received validation from Beijing. The CCP likely wants strong input into the algorithms and parameters these chat bots use so it can influence the outputs.
