Chinese investors pump up ChatGPT shares

A few months after its launch, ChatGPT - which can generate articles, essays, jokes and even poetry in response to prompts - has been rated as the fastest-growing consumer app in history. That has pushed Google owner Alphabet Inc to plan its own chatbot service and use more artificial intelligence for its search engine.

While ChatGPT is not accessible in China, mainland investors are still pumping up the shares of AI technology companies such as Hanwang Technology Co, TRS Information Technology Co and Cloudwalk Technology Co.

The CSI AI Industry Index, which includes larger capitalized companies such as iFlytek Co, is up a bit over 17% this year, beating the benchmark CSI 300 Index's 6% rise.

There is no indication that these AI companies are about to launch a ChatGPT-like product. Baidu Inc is the closest to search engine giant, with plans to complete testing of its Ernie bot in March. Its shares went up more than 13% on Tuesday after making the announcement.

The industry as a whole tends to speculate on expectations before trading on actual results later, said Zhang Kexing, general manager of Beijing Gelei Asset Management.

After markets opened from the Lunar New Year holiday, the shares of Hanwang Technology went up by 10%, boosting prices by more than 60% in February.

The company expects to report an annual loss for 2022, but believes that it has an edge over an interface like ChatGPT because its model can produce more precise results for clients.

Cloudwalk shares have doubled in the seven trading days since the Lunar New Year holidays. The company cautioned investors, saying it had not cooperated with OpenAI in 2022 and that it had no revenues from ChatGPT-related services and products.

Other companies that have disclosed their progress in AI technology include TRS Information Technology and Beijing Haitian Ruisheng Science Technology Ltd. Their share prices have gone up as well.

The price surge has stretched valuations. The TRS, for example, trades at more than 60 times earnings, while Huisheng's price-to- earnings ratio is more than 240.

Retail investor Lu Deyong purchased shares in TRS and iFlytek and is trying to profit from the ChatGPT hype.

He said that ChatGPT was just a hot idea. He doesn't think China can realize such a technology in the short term. Lu said that retail investors prefer smaller stocks with this concept to make quick money.