Baidu
shares plunged in Hong Kong on Monday 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
stock dropped 12% in Hong Kong 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 and said the researchers used functions available to any user.
“Baidu has no affiliation or other partnership with the academic institution in question. We have no knowledge of the research project, and if our LLM [large language model] was used, it would have been the version publicly available online,” a Baidu spokesperson said in an emailed statement.
Baidu’s American depositary receipts weren’t trading on Monday due to the U.S. holiday for Marin Luther King day but the ADRs fell 7% last Friday, the day the report was first published but before Baidu rejected links with the laboratory concerned.
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.Â
The competition in China’s AI sector is fierce, with internet giants
Alibaba
and
Tencent
 also launching their own AI models last year.
Alibaba
shares fell 0.8% in Hong Kong on Monday, while Tencent rose 0.4%.
Write to Adam Clark at [email protected]
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