Baidu’s lacklustre chatbot unveiling exposes gaps in China’s AI race

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    22nd March 2023 – (Beijing) Baidu, China’s search giant, recently unveiled its much-anticipated chatbot, “Ernie Bot,” but its limited capabilities exposed the gaps in China’s race to rival ChatGPT, the language model developed by OpenAI. The lacklustre unveiling comes as censorship and the US squeeze on chip imports hamstrung the country’s artificial intelligence ambitions.

    Ernie Bot’s preview was limited to a pre-recorded demonstration with simple questions to summarise the plot of a sci-fi novel and solving a straightforward algebra equation. None of the services that Baidu had earlier promised its Ernie Bot could do were on display. Consequently, the firm’s shares plunged as much as 10 per cent during the unveiling.

    A flurry of Chinese companies, including Alibaba, JD.com, Netease, and TikTok-parent Bytedance, have rushed to develop services that can mimic human speech since OpenAI launched ChatGPT in November, sparking a gold rush in the market.

    Google recently invited people in the United States and Britain to test its AI chatbot, known as Bard, as it continues on its own push to catch up. The popularity of ChatGPT in China has left Baidu and others scrambling to regain its dominance on home turf.

    “OpenAI probably spent as much time just testing GPT-4 as Baidu spent building Ernie Bot,” said Matt Sheehan, a fellow at the Carnegie Endowment for International Peace. “China’s tech ecosystem doesn’t have a tradition of funding open-ended research that doesn’t have a clear path to profitability.”

    Ernie Bot is fluent in Mandarin, as well as other regional languages, including Hakka spoken in South China and Taiwan, and targets the Chinese market with more than one billion internet users.

    Beijing’s heavy-handed censorship poses a headache for developers, censoring anything that challenges the Communist Party, including a one-time purge of Winnie-the-Pooh after the cartoon bear was compared to Xi Jinping. This factor coupled with the US squeeze on chip imports has hampered the country’s artificial intelligence ambitions.

    China has announced ambitious plans to become a global leader in the field of AI by 2030, and consultancy group McKinsey estimates the sector could add about US$600 billion every year to China’s gross domestic product by then. However, Washington’s move to suffocate China’s technology ambitions by blocking its access to high-grade chips and chipmaking equipment has made it difficult for Chinese companies to buy chips, including Nvidia’s A100 and its successor H100, considered the gold standard for large-scale AI training systems.

    “There is a real question whether a domestic supply can be generated in the short term,” said Lauren Hurcombe, a technology lawyer at DLA Piper. However, the effect of the U.S. measures will take time to make a dent because Chinese companies rushed to stockpile high-end chips before Washington announced the export controls in October.