Stocks rally as Baidu announces testing of ChatGPT-style project ‘Ernie Bot’

China’s Baidu Inc said on Tuesday it would complete internal testing of a ChatGPT-style project called “Ernie Bot” in March, as interest in generative artificial intelligence (AI) gathers steam.

The news sent search engine giant Baidu’s Hong Konglisted shares up 15.3 percent on Tuesday.

A flurry of Chinese AI stocks also rallied, as the global frenzy around the Microsoft-backed chatbot sensation ChatGPT spurred speculative bets on the new technology.

Just two months after its launch, ChatGPT -- which can generate articles, essays, jokes and even poetry in response to prompts -- has been rated the fastest-growing consumer app in history.

It has prompted many tech firms to double down on the heavily hyped generative AI technology, which until recently existed more in the background than as a solid contributor to the bottom line.

Google owner Alphabet Inc said on Monday it would launch a chatbot service and more AI for its search engine, while Microsoft plans its own AI reveal on Tuesday, underscoring growing rivalry to lead a new wave of computing.

Baidu, China’s answer to Google, joined the frenzy on Tuesday.

It said Ernie or “Enhanced Representation through Knowledge Integration,” is a large AI-powered language model introduced in 2019, and has gradually grown to be able to perform tasks including language understanding, language generation, and text-to-image generation.

A person familiar with the matter told Reuters last week that Baidu was planning to launch such a service in March.

The person said Baidu aims to make the service available as a standalone application and gradually merge it into its search engine by incorporating chatbot-generated results when users make search requests.

ChatGPT and key Google services are not available in China, although some users have found workarounds to access such tools.

Beijing-based Baidu has been a first mover in China on other tech trends.

In late 2021, when the metaverse became a new buzzword, the company launched “XiRang” which it described as China’s first metaverse platform.

The platform however was widely panned for not offering a high-level, immersive experience and Baidu said it was a work in progress.

The company has been investing heavily in AI technology, including in cloud services, chips, and autonomous driving, as it looks to diversify its revenue sources.

Google owner Alphabet Inc on Monday said it will launch a chatbot service and more artificial intelligence for its search engine as well as developers, an answer to Microsoft Corp in their rivalry to lead a new wave of computing. Microsoft, meanwhile, said it planned its own AI reveal for Tuesday.

The cascade of news reflects how Silicon Valley is anticipating massive change from so-called generative AI, technology that can create prose or other content on command and free up white-collar workers’ time.

The ascent of ChatGPT, a chatbot from Microsoftbacked OpenAI that could disrupt how consumers search for information, has been one of the biggest challenges to Google in recent memory.

In a blog post, Alphabet Chief Executive Sundar Pichai said his company is opening a conversational AI service called Bard to test users for feedback, followed by a public release in the coming weeks.

He also said Google plans to add AI features to its search engine that synthesize material for complex queries, like whether learning guitar or piano is easier. Currently, Google presents text that exists elsewhere on the Web for questions where the answer is clear.