Baidu Stock Price Fell Despite Unveiling a New Version of Its Ernie AI

The Baidu Inc (NASDAQ: BIDU) stock price was down 1.48% premarket after the company unveiled version 4.0 of its ErnieBot, which is its generative AI model, which it says is more advanced than OPenAI’s ChatGPT-4, which is the industry leader.

The Chinese tech giant failed to impress analysts and investors with today’s launch of its generative AI model, given that many did not see a massive improvement from the AI’s previous version. Still, the company’s CEO, Robin Li, showcased the AI writing a martial arts novel in real-time and creating advertising videos and posters. 

During the live presentation, Li demonstrated the remarkable capabilities of the bot. It showcased the ability to swiftly produce a commercial for an automobile, solve intricate mathematical problems, and even create an entire storyline for a martial arts novel from the ground up.

The bot predominantly operates in Mandarin Chinese, its primary language. Nevertheless, it can also respond to inquiries and generate content in English, albeit at a somewhat less advanced level. This showcases the versatility and proficiency of the bot in handling a range of tasks and languages, particularly excelling in its native Mandarin Chinese.

The ERNIE Bot was launched in March this year, leaving most investors unimpressed as Baidu demonstrated its operation via a pre-recorded video instead of a live demonstration like today’s. The company later publicly launched the bot in August, attracting over 45 million users. 

Meanwhile, ChatGPT, introduced in November 2022, achieved an even more impressive milestone, surpassing 100 million users within its first two months, according to a report by Goldman Sachs analysts in March. 

The Ernie bot reached the top position in Chinese app stores at one point, as reported by the company. These figures underscore these AI-driven conversational tools' growing popularity and effectiveness in serving a broad user base.

Baidu faces stiff competition in the Chinese market from companies like Alibaba and SenseTime, which have introduced ChatGPT-style tools. Baidu distinguishes its service by its sophisticated understanding of Chinese queries and capacity to generate diverse responses, including video and audio content.

Baidu stock price. 

Despite unveiling a new version of its Ernie AI model, the Baidu stock price was down 1.48% premarket.