Investors in the sizzling rally in global artificial intelligence (AI)-related stocks are getting a reality check.
Google’s demonstration of its AI chatbot has already underwhelmed investors with accuracy concerns, spurring the biggest drop in its parent’s shares on Wednesday in more than three months.
A Chinese newspaper yesterday warned investors not to blindly join the speculation about stocks that could benefit from rolling out such AI capabilities, saying that it would take time for such concepts to prove their value.
Photo: Reuters
Baidu Inc (百度) shares slumped as much as 8.5 percent in Hong Kong after scoring its best day since March last year when it said on Tuesday that its ChatGPT-like service was on track for roll out.
Other firms including Zhihu Inc (知乎), Cloudwalk Technology Co (雲從科技), Beijing Deep Glint Technology Co (北京格靈深瞳) and Hanwang Technology Co (漢王科技) also declined.
“The recent buying into ChatGPT has been very speculative. So the sentiment can cool down very easily if there is regulatory warnings,” Central China Securities Co (中原證券) strategist Zhang Gang (張剛) said.
In a front-page editorial, the Securities Times highlighted several technological concepts that previously spurred stock buying in China — such as 5G telecommunications networks, augmented reality, virtual reality and anti-virus garments — the excitement for which has died down.
Although some hotly chased concepts have been successful, “many more new ideas haven’t been commercialized, or require more time to prove,” the state-backed newspaper said. “However, some people avidly speculate on fake concepts, luring others into schemes of pumps and dumps. Investors eventually end up in tears, so they should not follow.”
Companies developing ChatGPT-like concepts have also flagged risks at the request of regulators after their prices shot up amid intense interest in generative AI, technology that can generate data and media such as text and images.
Beijing Haitian Ruisheng Science Technology Ltd (北京海天瑞聲) said its ChatGPT-style products and services do not yet generate revenue, and that it has no relationship with OpenAI.
Although such technology “is on a long-term uptrend, we need to analyze its speed of growth and effect in a cool-headed way,” it said in a filing with the Shanghai Stock Exchange.
The company said it expects an about 50 percent slump in last year’s net profit and admonished investors to be cautious as its valuation is much higher than the industry average.
Another company, 360 Security Technology Co (三六零安全科技), said that its self-developed ChatGPT-related technology is still at a nascent stage, and it is uncertain about when it can market such products and how effective they will be.
Cloudwalk, a face-recognition technology developer, also said that it has not generated any revenue from ChatGPT products and that it was not involved in any collaboration with OpenAI.
With the initial euphoria tapering, attention has now shifted to navigating the milestone progress at the firms.
Google parent Alphabet Inc’s shares tumbled as much as 8.9 percent on Wednesday after an underwhelming demonstration of its new chatbot.
Analysts said it would take some time for real winners to emerge in the space, with regulatory approval and monetization of the technology being key for such services to take off in China.
“The verdict on China’s self-developed ChatGPT-style tools, which look set to enter the market this year after media reported Feb. 8 that Alibaba Group Holding Ltd (阿里巴巴) is testing its application, similar to NetEase Inc (網易), might only emerge in 2024 as competition spurs innovations in the technology through 2023,” Bloomberg Intelligence analysts wrote in a note.
Additional reporting by Reuters
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