Chinese Trio of Tech Giants Flock To Chat GPT Race

Despite concerns about the technology's capabilities and commercial prospects, China's largest tech companies are racing to develop their own versions of ChatGPT, the AI-powered chatbot that has enthralled the US tech world.

This week, Alibaba Group Holding, Tencent Holdings, Baidu, NetEase, and JD.com all announced plans to test and launch their own ChatGPT-like services in the near future, eager to demonstrate that the results of their AI research efforts are just as ready for prime time as those of their American counterparts.

Microsoft-backed ChatGPT sparked the hunt after becoming the fastest-growing consumer app in history since its November launch. In response to prompts, the chatbot can generate articles, essays, jokes, and even poetry. Google recently announced a similar service, Bard AI, though a rocky demonstration of the technology sent Alphabet shares plummeting on Wednesday.

AI-related technology competition has geopolitical overtones, as it is one of the most hotly contested fields in the US-China tech rivalry.

Baidu shares rose to an 11-month high on Monday after the search giant revealed plans to launch the ChatGPT-style "Ernie Bot," which is built on technology that the company claims has been in development since 2019. Before making the chatbot public, the company plans to complete internal testing in March.

Following Baidu's announcement, Alibaba stated that it is internally testing a ChatGPT-style tool but provided no further details. On Thursday, the e-commerce conglomerate's shares closed up 3.96% in Hong Kong.

On Thursday, Tencent confirmed its plans for ChatGPT-style and AI-generated content, saying relevant research is being conducted "in an orderly manner."

JD.com, an online retailer, has stated that it intends to incorporate some of the technologies that power applications like ChatGPT, such as natural language processing, into its own services. NetEase has announced that it is investigating the incorporation of AI-generated content into its education unit.

According to Chinese media, ByteDance's AI lab has launched certain research initiatives on technologies to support its virtual reality arm Pico. However, a source close to the situation at ByteDance told Nikkei that the report was false.

Some in the industry believe the hype surrounding AI should be viewed with caution.

"Making use of AI-generated content is a natural thing," an executive from one of the leading listed Chinese tech companies told Nikkei, asking not to be named. "Whenever there is a so-called next big thing, multiple companies will announce that they are in this area, but some companies may be just hyping with the catchword without any concrete product.

"Another challenge is China's heavy censorship of cyberspace, which will make AI-generated content difficult, too."

According to Kai Wang, a senior equity analyst at Morningstar Asia Limited, many Chinese AI companies see ChatGPT-like technology as a long-term growth driver for their products, so when Baidu announced plans to launch a similar product in March, many other AI companies wanted to take advantage of the opportunity as well.

However, Wang expressed concern about how a chatbot would function in China, citing the fact that these products are still in their early stages of development.

"There is a lot of uncertainty over the competitive landscape, regulations and, ultimately, how well it works at this stage," he said. "We also have to be wary about how monetization of these products would work and how margin dilutive they are in the long run."

On Thursday, Chinese artificial intelligence-related stocks plummeted after state media warned of the dangers of "some new concepts" being overhyped.

"Some people avidly speculate on fake concepts, luring others into pump-and-dump schemes," an editorial in the Securities Times said. "Investors eventually end up in tears, so they should not follow."