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AI Chatbot Ernie

AI Chatbot “Ernie” China’s New ChatGPT Contender

Once one of China’s leading tech giants, Baidu, has recently seen its fortunes decline as rivals like Alibaba and Tencent dominated e-commerce and social media.

But Baidu is staging a comeback thanks to artificial intelligence, specifically its new AI chatbot, Ernie.

Ernie, unveiled on 31 August, is China’s answer to ChatGPT. Within 19 hours, it had been downloaded over 1 million times, far outpacing ChatGPT’s early growth.

Ernie’s launch comes after Baidu invested heavily in AI over the past few years, making it one of China’s most advanced AI companies.

Generative AI Reignites Interest in Baidu

The rollout of Ernie and other AI products has reignited excitement about Baidu. Its share price rallied over 4% the day Ernie debuted.

While several other Chinese tech firms also launched AI chatbots that day with government approval, Ernie generated the most buzz.

Robin Li, Baidu’s CEO, called AI a “major transition” for the company.

Baidu started developing Ernie in 2019, making it one of the first to build a generative AI chatbot. While Baidu has not given guidance on AI’s financial impact, analysts believe Ernie will drive more traffic and ad revenue to Baidu’s platforms.

Caution Remains Around Monetisation and Regulation

However, uncertainties around monetisation and regulation persist.

Baidu’s other significant AI initiative – an autonomous taxi service – has seen muted enthusiasm, with doubts profits are imminent.

AI chatbots also face content regulations in China, like identifying and reporting “illegal content.”

Firms must ensure products adhere to “core socialist values,” a broad, ambiguous order. Ernie’s early mishaps, like generating a cat with the US flag when prompted to draw a “patriotic cat,” saw words like “patriotism” quickly blocked.

Such censorship and compliance costs could escalate for AI companies. While China approved chatbots relatively quickly, likely knowing their commercial value, heavy-handed regulations remain a risk.

Recent crackdowns on tech firms show the sector’s fragility.

US Export Controls Cause Headaches

Baidu also faces challenges from US export controls on advanced semiconductors needed for AI model training.

With China unable to produce such chips domestically, Baidu has downplayed its reliance on Taiwan’s TSMC to make its Kunlun AI chips.

The geopolitical tensions add uncertainty to Baidu’s AI ambitions.

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Ernie Bot – Impressive Yet Limited

Ernie Bot has undoubtedly made an impression with its conversational prowess.

However, its developmental challenges are evident. The bot tends to sidestep sensitive political subjects, has shown potential misconceptions in its responses – including possible inaccuracies about the origins of COVID-19 – and often diverts from contentious topics.

These characteristics are indicative of both the constraints of China’s censorship framework and the current developmental stage of the technology.

What’s Next for Baidu and Ernie?

Ernie Bot’s warm reception has been a positive for Baidu after years of slipping market share. But, it remains early days for assessing AI’s long-term impact.

Baidu must continue investing in talent and computing power to keep pace with AI leaders in the US and elsewhere. And while Ernie may drive renewed interest in Baidu, turning that into sustainable profits while navigating a challenging regulatory and geopolitical environment will be an ongoing challenge.

For now, Baidu is back in the spotlight. After being dwarfed by the likes of Alibaba and Tencent, Baidu has a chance to prove it can still compete at the cutting edge of technology.

But the road ahead will test Baidu’s capabilities in making AI commercially viable on a large scale under social and political constraints few tech firms face.

Ryan Anderson

Ryan specialises in AI media subjects, covering innovations in AI art, music, and more. His academic background, with an MSc in Product Design Engineering and a Masters of Design from Glasgow School of Art, provides a rich foundation for his writings.

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