On Thursday, Chinese state media cautioned regarding the potential dangers of investing in local AI-based companies. Meanwhile, domestic AI companies have called on investors to act rationally, as rapid increase in share prices has attracted the attention of regulators, Reuters reported.
ChatGPT, an artificially intelligent (AI) chatbot backed by Microsoft and developed by OpenAI has has made a significant impact and has prompted tech industry leaders to join the trend it has set. The stock price of AI companies has skyrocketed as a result of ChatGPT’s success.
There has been a surge of interest and excitement surrounding the technology launched at the end of November, which has led to a significant increase in the stock price of a company called Beijing Haitian Ruisheng Science Technology Ltd. The stock has risen by 217% in the current year due to this hype.
Similarly, Hanwang Technology Co. Ltd.’s stock has risen by 129%, and TRS Information Technology Co. Ltd. saw a hike of 66%.
Following the cautionary statement from state media, stocks experienced a decline on Thursday, which was further impacted by a drop in Alphabet Inc. shares. This resulted in a loss of $100 billion in market value, as Google’s parent company and rival of ChatGPT shared false information.
Shanghai stock exchange also cautioned
The recent developments regarding AI stocks in China have drawn the attention of the Shanghai Stock Exchange, which sent a letter to CloudWalk Technology and Haitian Ruisheng Science regarding the “abnormal trading” observed in the stocks of these companies.
“Please pay attention to investors, avoid capital risks, hype, make rational decisions, and invest prudently, The continuous rise of the company’s stock price has accumulated more risk of profit adjustment, ” it said.
Similarly, the state media also warned with reference to the past hype of buying stock. The Securities Times, a publication in China, highlighted the technology-driven trends that previously drove stock purchases in the country. These trends included cutting-edge advancements such as 5G networks, augmented reality, virtual reality, and anti-virus garments. However, the initial excitement surrounding these concepts has since faded.
The Securities Times, as stated by the media, noted that although some of these technology-focused concepts have proven successful, many more are yet to be commercially viable or need more time to establish their worth.
“However, some people avidly speculate on fake concepts, luring others into schemes of pumps and dumps. Investors eventually end up in tears so they should not follow,” said the state-backed newspaper.
Companies also flagged risks
Not just the regulator and media, but the companies developing ChatGPT-like concepts have also flagged risks after the price of their stock hiked amid extreme interest in generative AI.
Beijing Haitian Ruisheng Science and Technology said its products and services, like ChatGPT, have yet to generate revenue, and it has no relationship with ChatGPT developer OpenAI.
Nonetheless such technology “is on a long-term uptrend, we need to analys its speed of growth, and effect in a cool-headed way,” the company said in a filing response to Shanghai Stock Exachange.
The latest steps taken by local tech giants like Alibaba and Baidu in their excitement to enter the AI chatbot era have also pumped the stock. Baidu is nearing the end of testing its new product, ChatGPT, and Alibaba announced that it was working on the same project.