Baidu price surges as Citigroup gives it preliminary approval

On Friday, the price of Baidu Inc. surged more than 14%, after brokerages including Citigroup tested the company's just-unveiled ChatGPT-like service and gave it their preliminary approval.

Baidu s leap reversed a 6.4% loss on Thursday after founder Robin Li debuted China's answer to ChatGPT via recorded video, disappointing investors hoping for a real-time demo of the country's highest-profile entry in a race to dominate the technology.

In a meeting on the same day, Citigroup put Ernie Bot through its paces and found that it could answer the majority of complicated or absurd questions that were put forward, analysts including Alicia Yap wrote.

The Chinese firm's shares rose by 8% to 15% on an intraday basis, leading to a rally in AI-linked stocks including SenseTime Group Inc. chip designer Cambricon Technologies Corp. and Arcsoft Corp.

While the short presentation and humble comments from the CEO and CTO and the pre-recorded ERNIE demo may have disappointed investors and media, the live demos during our meeting with the CFO and IR team reassured us that ERNIE s generative capability is not yet perfect - it has the ability to answer the large majority of our complicated absurd questions, according to analysts. Citi didn't specify the questions they posed to the AI.

Some of the questions in Baidu's videos appeared rudimentary and addressable by conventional search engines, such as: What part of China does the author of Three Body Problems come from? Users took to Chinese social media to poke fun at the event, with one user calling it a low-energy debut.

Thursday s launch was to have been a watershed moment for China's technology industry, lifting the lid on how AI has progressed in the world's largest internet economy. Since its November launch, Ernie s ability to match OpenAI's ChatGPT has both impressed and worried users because of the omission of a live demo.

Chinese AI efforts are slower than their US rivals at the moment, but they should catch up over time thanks to the vast data hoards and experience with rapid rollouts, according to industry pioneer and bestselling author Kai-Fu Lee.

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