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Political Challenges for Baidu’s AI Amid Military Testing Controversy


Baidu, the renowned Chinese internet company, experienced a significant stock decline of 12% in Hong Kong. This came in response to reports stating that researchers associated with the Chinese military had conducted tests on Baidu’s artificial intelligence chatbot. The concerns raised regarding the company’s AI efforts potentially being entangled with the military have led investors to fear potential United States sanctions. In response, Baidu distanced itself from the research, emphasizing its lack of affiliation with the laboratory responsible.

The laboratory in question is linked to the People’s Liberation Army’s Strategic Support Force, overseeing cyberwarfare operations. Allegedly, their AI system was employed on Baidu’s Ernie Bot, causing apprehension among investors regarding any possible connections between Baidu and the Chinese military.

To address these concerns, Baidu clarified that the researchers had utilized functions accessible to any user and that the company had no knowledge of the specific research project. They further emphasized that if their large language model (LLM) was involved, it would be identical to the publicly available online version.

Although Baidu’s American depositary receipts were not actively trading due to Martin Luther King Day in the United States, they had already fallen by 7% on the Friday preceding the report’s publication. However, this decline occurred prior to Baidu officially disassociating itself from the laboratory involved.

While Baidu is widely recognized for its search engine, it is currently striving to become China’s leading AI enterprise. In fact, they recently disclosed that their Chinese-language alternative to ChatGPT, known as Ernie Bot, has already amassed over 100 million users. Nevertheless, Baidu encountered obstacles related to U.S. restrictions on exports to China, which placed the company in limbo alongside other Chinese businesses in terms of AI chip orders from Nvidia, according to The Wall Street Journal.

The AI sector in China is highly competitive, as evident from other internet giants like Alibaba and Tencent launching their own AI models last year. As a result of the controversy, Alibaba’s shares experienced a minor decline of 0.8% in Hong Kong, while Tencent saw a 0.4% increase.

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