After Chinese search giant Baidu revealed its highly-anticipated competitor ChatGPT, the battle for AI chatbots has intensified.

Ernie, an acronym for enhanced representation through knowledge integration, was displayed by the company. Analysts believe that Ernie could be Beijing’s strongest competitor within a competitive field dominated largely by US companies.

ChatGPT was developed by OpenAI, a Microsoft-backed startup. Google and other ambitious startups are also working on large-language models.

After announcing last month that it would soon have a ready-to-launch product, the growing interest in the technology led to a rush by Chinese tech giants to create their own. Baidu was at the forefront of this race.

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Robin Li, chief executive of the company, admitted that the chatbot wasn’t ready for primetime after a presentation at headquarters.

He said, “For certain, we cannot claim it is perfect.”

“So, why aren’t we revealing it today?” It’s because the market requires it.”

What can Ernie get done?

Thursday’s demonstration featured many of the characteristics of what people are used to with chatGPT.

Ernie was shown answering questions and understanding different languages.

It also demonstrated the ability to create video and images using text prompts.

Baidu wants Ernie, its search engine revolutionizer, to be just like Microsoft using OpenAI’s tech for Bing.

Continue reading: How AI could transform the way we search the web

Investors were not moved by the demonstration, since everything was recorded and not shown live.

It is also not publically available. However, limited invitation codes will be sent out starting on Thursday.

The tech has been used by hundreds of companies. Baidu claims that it could power driverless cars and smart devices.

During the presentation, shares fell as high as 10%. Although they did recover slightly at the end of the presentation, it still took $3bn (PS2.5bn), off the company’s market value.

Kai Wang, analyst: “It seemed like the presentation was more monologue-scripted than interactive.

“There was also no soft launch date, which probably led to negative sentiments.”

Baidu plays down US rivalry

Mr Li, Baidu’s boss, appeared to praise OpenAI’s technology during his presentation. He said that it demonstrated the high threshold required for companies to succeed in this space.

The speech was streamed live across many platforms, even those that are blocked in China, such as YouTube and Twitter.

Mr Li said that “Ernie Bot” is not a tool for confrontation between China, the US and other countries.

This presentation was made days after OpenAI had announced the next version of ChatGPT. It has attracted hundreds and millions of users since its launch in late 2022.

Microsoft will also host an AI event Thursday. Google, on the other hand, announced this week that it would bring generative AI to workplace apps such as Docs and Gmail.