Stand aside ChatGPT & Bard, make way for Ernie
US-listed shares of Baidu head south, following its HK-listed shares lower after the launch of its AI-powered Ernie bot. IG’s Angeline Ong explains what this means for the global AI race.
Ernie bot
Stand aside ChatGPT and Bard, make way for ... Ernie bot. Created by Baidu Inc - ADR (All Sessions), it's China's challenger to the 'Who Got Bot' game. Now, why does this all matter? Well, first it pits Baidu against Alphabet Inc - A (All Sessions) Google's own AI bot called 'Bard' and Microsoft Corp (All Sessions) and OpenAI's 'ChatGPT', effectively making this a three-horse AI race.
Timing
Secondly, it comes at a pivotal time, Ernie bot's entry comes just days after Alphabet's Google lifted the cover off a bunch of AI tools for its email and cloud software.
Baidu's share reaction
Thirdly, Baidu Inc Hong Kong Listing's shares sank as much as 10%, while its CEO spoke about Ernie, before closing some 6% lower. This shaved off more than $3 billion off Baidu's market cap. Ernie will only be tested by a number of invited users from Thursday and companies can apply to embed the bot into their products via Baidu's cloud.
AI race heats up
So, the AI race is heating up, but it remains to be seen if it morphs into something else. Baidu's boss has already reiterated that Ernie is not a confrontation tool between China and the US. Ernie, for those of you wondering, stands for ''Enhanced Representation of Knowledge Integration'. What it actually becomes, remains to be seen.
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