By
Godfrey Benjamin
April 19th, 2024
Increasing interest in OpenAI’s ChatGPT initiative has sent the stocks of several Chinese-based AI companies skywards.
Chinese AI stocks have reportedly risen on the growing interest in the popular AI platform ChatGPT (Chat Generative Pre-trained Transformer). However, Chinese state media is preaching caution.
A CNBC report states that artificial intelligence-linked stocks in mainland China climbed this year due to growing ChatGPT interest. One Chinese AI company has seen its valuation triple since the beginning of 2023 due to this development.
The Shanghai-listed shares of AI data resource company Beijing Haitian Ruisheng Science swelled 205% year-to-date (YTD). In addition, Hanwang Technology’s stock increased 124% during the same period, while CloudWalk Technology Company climbed 105%.
Chinese Stock Exchange, State Media Forewarn of Associated Risks from ChatGPT-induced Surge in AI Stocks
However, the latest surge in China’s AI stocks drew the attention of the Shanghai Stock Exchange, which warned of associated risks. In a letter to Haitian Ruisheng Science and CloudWalk Technology, the bourse cited “abnormal trading” of both AI companies’ stocks. Furthermore, the Shanghai Stock Exchange also warned investors in a Tuesday filing. Calling for more prudent and judicious actions, the major mainland China stock exchange said:
“Please pay attention to investors, avoid capital risks, hype, make rational decisions, and invest prudently. The continuous rise of the company’s stock price has accumulated more risk of profit adjustment.”
As if to underscore the Shanghai stock exchange’s point, Hong Kong-listed Zhihu soared to an all-time intraday high yesterday. This development came as investors continually bet on the emerging tech sector.
Chinese state media also forewarned of associated risks from betting on AI companies and platforms. In a Wednesday commentary, the Securities Times explained that some companies were only tagging along with the bullish momentum. According to the media outfit, these companies were “simply riding on the concept without conducting actual businesses.” Furthermore, the Chinese national financial newspaper also cited previous hypes regarding the augmented reality, virtual reality, and 5G.
Meanwhile, a separate Securities Times article referenced the Shanghai Stock Exchange’s warnings regarding the stock trajectory of AI companies.
“Even if domestic companies have the desire to enter ChatGPT, risks that lie ahead include whether they can achieve large-scale and lasting investment, whether they can keep up with the industry iteration cycle, and whether they can form scenario-based results,” the article reads.
Alibaba, Baidu Chatbots in Progress
Two of China’s most prominent tech companies are currently working on their respective technology to rival ChatGPT. In a media session with CNBC, Hangzhou-based e-commerce giant Alibaba recently revealed its plans. Furthermore, a spokesperson for the company also explained:
“As a technology leader, we will continue to invest in turning cutting-edge innovations into value-added applications for our customers as well as their end-users through cloud services.”
With this development, Alibaba joins other tech firms, including Baidu and Google, looking to create their own ChatGPT-style bots.
Chinese tech giant Baidu also recently disclosed internal testing for its AI chatbot called Ernie bot. According to the Beijing-based company, internal testing for the AI chatbot should conclude in March before a public release.
Elsewhere, AI-linked stocks in South Korea have also been on the upswing following increased chatbot attention.