China lets Baidu, others launch ChatGPT-like bots to public, tech shares jump (updated)

SenseTime

31/08/2023 06:01

* 
      Baidu, SenseTime, Baichuan open AI products to the public 
    

        * 
      Chinese media say 11 firms have received government
approval
    

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      Approvals anticipated after Beijing passed generative AI
rules
    

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      Shares in Baidu, SenseTime jump 
    

  
 (Adds analyst comments from paragraph 10 and below, updates
shares)
    By Josh Ye and Urvi Manoj  Dugar
       Aug 31 (Reuters) - Four Chinese tech firms including
Baidu Inc  9888.HK  and SenseTime Group  0200.HK  on Thursday
launched their artificial intelligence (AI) chatbots to the
public after receiving government approval, as China's
government pushes to widen the use of such products amid
competition with the United States.
    Baidu, China's leading online search provider, said in a
statement that its ChatGPT-like chatbot, Ernie Bot, was now
fully accessible to the public. A SenseTime spokesperson told
Reuters via email that its chatbot, SenseChat, was also now
"fully available to serve all users". 
    Two AI startups, Baichuan Intelligent Technology and Zhipu
AI, also announced similar public launches on Thursday.
    Shares in Baidu and SenseTime jumped in early Hong Kong
trade, gaining 3.1% and 2.7% respectively in a broader market
that was trading 0.4 percent lower. 
    Unlike other countries, China requires companies to submit
security assessments and receive clearance before releasing mass
market AI products.
    Authorities have recently accelerated efforts to support
companies to develop AI as the technology increasingly becomes a
focus of competition with the United States.
    Chinese media reported that a total of 11 firms had received
approvals from the government, including TikTok owner ByteDance
and Tencent Holdings  0700.HK . Neither company immediately
responded to requests for comment about their AI plans. 
    Some local media outlets said other tech firms working on AI
large language models, including Alibaba Group  9988.HK , had
not obtained government approval. Alibaba did not immediately
respond to a request for comment. 
    "I think the ones that got approved have an early mover
advantage to be able to fine-tune their product faster than
competitors," Kai Wang, an analyst at Morningstar.
    ChatGPT-maker OpenAI, which is backed by Microsoft  MSFT.O ,
is on track to generate more than $1 billion in revenue over the
next 12 months, tech-focused publication The Information
reported on Tuesday.  
    The approvals were widely anticipated after China published
a set of interim rules aimed at regulating generative AI
products for the public that went into effect on Aug. 15. 
    Previously, companies were only allowed to conduct
small-scale public tests of AI products but with the new rules,
companies have widened their AI product tests by enabling more
features and engaging in more marketing. Prior government
approval is not needed for products targeting businesses.
    Shawn Yang, an analyst at Blue Lotus Capital Advisors, said
the government's move to greenlight AI products could spark
consolidation in the industry. 
    "Many people were rushing into the large language model
business," he said, "But the industry may soon consolidate. Only
those with data and tech capability will be able to push
forward."

 (Reporting by Urvi Dugar and Jyoti Narayan in Bengaluru, and
Josh Ye in Hong Kong; Editing by Tomasz Janowski, Richard Chang,
Brenda Goh and Miral Fahmy)
 ((UrviManoj.Dugar@thomsonreuters.com;))