AI has been the new buzzword among tech companies ever since OpenAI-backed ChatGPT’s popularity took everyone by surprise. Google and Baidu have also announced rival AI offerings and the former’s Bard would be available for the general public in a few weeks.
Baidu stock is trading almost 15% higher in US premarkets today and looks set to hit a multi-month higher after it confirmed that it is testing a project called “Ernie Bot” internally. Ernie is a ChatGPT-like project and Baidu expects to finish the internal testing by March.
Ernie stands for Enhanced Representation through Knowledge Integration and is called Wenxin Yiyan in Chinese.
Baidu, which is the largest search engine in China said, “What distinguishes ERNIE from other language models is its integration of extensive knowledge with massive data, resulting in exceptional understanding and generation capabilities.”
Separately, yesterday Google also said that it has opened its Bard AI for testing. Currently, the testing is available for select trusted users but the company expects to roll it out publicly in a few weeks. Bard is widely seen as Google’s answer to ChatGPT.
In a blog post, Alphabet’s CEO Sundar Pichai said, “Bard seeks to combine the breadth of the world’s knowledge with the power, intelligence and creativity of our large language models. It draws on information from the web to provide fresh, high-quality responses.”
Incidentally, the news of AI bots from Baidu and Google comes ahead of Microsoft’s surprise event today where many expect it to announce ChatGPT-powered Bing.
Microsoft Announced Massive Investment in OpenAI
Last month, Microsoft announced the widely speculated investment in OpenAI. The investment would be in phases and spread across several years. Microsoft called it a “multi-billion” dollar investment and markets speculate that it could be worth $10 billion.
Commenting on the enhanced partnership, MSFT CEO Satya Nadella said, “In this next phase of our partnership, developers and organizations across industries will have access to the best AI infrastructure, models, and toolchain with Azure to build and run their applications.”
There has been a funding winter for startup companies and many have shut down. Given the turmoil in public markets, valuations of private startup companies have also come down.
However, some privately-held companies like ChatGPT and Elon Musk’s SpaceX are still getting good interest from investors.
Coming back to Microsoft’s partnership with OpenAI, D.A. Davidson believes that Microsoft’s investment in OpenAI would help it challenge the dominance of Google. The brokerage initiated coverage on Microsoft with a buy rating and $270 target price. There is a guide on how to buy Microsoft stock.
Many See ChatGPT as a Threat to Google’s Dominance
For years, Google has dominated the internet search industry. However, many see ChatGPT as a big threat to the company especially given the initial euphoria.
Amid multiple concerns, Alphabet stock also fell in 2022 even as many analysts considered it along with Apple, as a relatively safe bet. Alphabet meanwhile was the second best-performing FAANG of 2022 trailing just Apple. It still underperformed the Nasdaq Composite in 2022.
Talking of Baidu, the company has been taking strides in new tech industries. In late December, it started offering robotaxis during the night in Wuhan.
Baidu started offering robotaxi rides in August only. It has been scaling up its autonomous driving operations even as some of the competitors have cut their bets in the sector.
As for search engines, ChatGPT has brought in a new sense of urgency among incumbents as they try to fend off their turf from the startup company.
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