Chinese state media and AI firms issue warnings on ChatGPT stock frenzy hazards

By Samuel Shen; Edited by News Gate Team

A keyboard is seen reflected on a computer screen displaying the website of ChatGPT, an AI chatbot from OpenAI, in this illustration picture taken Feb. 8, 2023.
REUTERS/Florence Lo/Illustration/File Photo

Reuters, Feb. 9, Shanghai – Chinese state media warned against the risks of pursuing regional ChatGPT-concept stock values on Thursday, while domestic artificial intelligence (AI) firms advised investors to exercise caution after their skyrocketing share prices attracted regulators’ scrutiny.

ChatGPT, a chatbot created by American company OpenAI with support from Microsoft Corp. (MSFT.O), responds to user questions in a startlingly human-like manner. Shares of Beijing Haitian Ruisheng Science Technology Ltd (688787.SS) have increased 217% this year due to the frenzy surrounding the technology announced at the end of November.

Wednesday saw gains of up to 129% for Hanwang Technology Co Ltd (002362.SZ), 128% for CloudWalk Technology Co Ltd (688327.SS), and 66% for TRS Information Technology Co Ltd (300229.SZ).

Following the state media alert and a decline in Alphabet Inc. (GOOGL.O) shares that erased $100 billion in market value after the Google parent’s ChatGPT rival revealed false information, the equities fell on Thursday.

The excitement for various technical concepts, including fifth-generation telecommunications networks (5G), augmented reality (AR), virtual reality (VR), and anti-virus clothing, has subsided, according to a front-page editorial in the Securities Times.

Despite the fact that some hotly contested theories have been put into practice, the state-run publication noted that “many more fresh ideas haven’t been commercialized, or require more time to show.”

“However, some individuals actively speculate on false ideas, seducing others into pump-and-dump scams. Investors eventually cry, so they shouldn’t do the same.”

Companies creating ChatGPT-type ideas have also warned about hazards at regulators’ urging after their costs skyrocketed as a result of the increasing interest in generative AI, which can produce fresh data and media like text and images.

Beijing Haitian Ruisheng Science Technology said that it has no affiliation with OpenAI and that its ChatGPT-inspired goods and services do not yet earn any income.

Although such technology “is on a long-term ascent,” it stated in a filing in response to inquiries from the Shanghai Stock Exchange that “we need to examine its speed of expansion, and effect, in a cool-headed approach.”

The company warned investors to exercise caution because its valuation is currently substantially higher than the industry average and stated that it anticipates an approximately 50% decline in net profit in 2022.

In answer to questions from authorities, 360 Security Technology Co Inc (601360.SS) stated that its in-house developed ChatGPT-related technology is still in its infancy and is primarily utilized as a productivity tool internally.

Because it’s unclear when it will be able to market products similar to ChatGPT and how effective they will be, “we advise investors to pay attention to market trading risks, make thoughtful decisions, and invest prudently.”

The largest Chinese e-commerce company, Alibaba Group Holding Ltd (9988.HK), announced on Wednesday that it is creating a ChatGPT-style tool, while rival Inc (9618.HK) stated that it intends to incorporate ChatGPT-like technology into some of its products. Both companies are well-funded and have recently entered the chatbot race.

According to a person familiar with the situation, gaming giant NetEase Inc (9999.HK) intends to use comparable “big language model” technologies in its education division.

By Samuel Shen; Edited by News Gate Team

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