Baidu Inc Denies Ties to Chinese Military Laboratory, Stock Plunges 12%
Baidu Inc (9888.HK, BIDU) faced a tumultuous start to the week as the internet services company’s shares took a nosedive following a report linking it to a Chinese military laboratory. The company swiftly responded, denying any ties to the military and issuing a statement to clarify the situation.
The report, initially published by the South China Morning Post, alleged that a research lab of the People’s Liberation Army’s Strategic Support Force was testing artificial intelligence systems on Baidu’s Ernie and iFlytek’s Spark models. This news caused Baidu’s stock to plummet by 12%.
Wenxinyiyan and Xinghuo, the large language models in question, are similar to OpenAI’s ChatGPT. The report led to significant concerns and speculation in the market, particularly as it involved ties to the Chinese military.
Baidu’s U.S. stocks were not traded on Monday due to the closure of the U.S. stock market for Martin Luther King Jr. Day, but the company’s Hong Kong listing took a hit from the report.
In response to the allegations, Baidu issued a statement insisting that it has no commercial cooperation with the authors of the academic paper that formed the basis of the report. The company clarified that it had not provided any customized services with the authors or the institutions to which they are affiliated. Baidu also pointed out that the South China Morning Post had corrected its original report.
The corrected report clarified that the PLA lab had tested its system on a Baidu model, refuting the initial claim of a physical link between the artificial intelligence system and Baidu’s Wen Xinyiyan. The newspaper further reported that the academic paper simulated the 2011 U.S. invasion of Libya and successfully predicted the U.S. military’s next move.
These developments highlight the significance of AI research and the potential ramifications of its use in military scenarios. The incident also underscores the impact that reports and allegations can have on the stock market, particularly for companies operating in sensitive areas such as AI and military technology. This article was translated from MarketWatch, which is operated by Dow Jones, the parent company of The Wall Street Journal. However, MarketWatch operates independently from Dow Jones Newswires and The Wall Street Journal.