Baidu surges after claiming AI tool nearing launch

By Geoffrey Smith 

Investing.com -- Shares in Chinese search engine giant Baidu (HK:9888) surged in Hong Kong on Tuesday after the company said it’s close to completing tests of an AI project akin to Microsoft-backed ChatGPT.

Baidu said it has been working on Ernie, an acronym for "Enhanced Representation through Knowledge Integration," since 2019 and intends to finish internal testing in March.

Baidu said Ernie can now perform tasks such as language understanding, language generation, and text-to-image generation.

The news suggests Baidu is close to having a product capable of competing with OpenAI's ChatGPT tool, which has had a profound impact since its launch in November. ChatGPT is not widely available in China, Baidu's home market.

Competition in the AI space is heating up rapidly, with Microsoft (NASDAQ:MSFT) backing OpenAI and Alphabet (NASDAQ:GOOGL) developing its own in-house tool for enhancing search and text composition. Others such as Meta Platforms (NASDAQ:META) and Tesla (NASDAQ:TSLA) have also earmarked big amounts for developing AI-powered functions.

Alphabet Chief Executive Sundar Pichai said on Monday his company will start gathering feedback from users on a conversational AI service, called Bard, aiming to release it publicly within weeks. Pichai said in a blog post on Monday that Bard would draw on information from the Internet, dovetailing with the capabilities of Google's search function.

"Bard seeks to combine the breadth of the world's knowledge with the power, intelligence and creativity" of Alphabet's own in-house capabilities, Pichai said.

Google's new chat tool is powered by LaMDA, the AI project that generated text so well in a test last year that one of its engineers last year called it "sentient". The company itself hasn't made any such claims for LamDA.  

Microsoft, meanwhile, said it is planning an update of its own on AI at an event Tuesday, which will be attended by OpenAI head Sam Altman.