ChatGPT-style artificial intelligence (AI) stocks in China soared following the chatbot's surge in popularity before state media warned of risks.
Investors round the world have flocked to AI-linked stocks in recent weeks and in the People's Republic it's been no different. The shares of Beijing Haitian Ruisheng Science Technology Ltd (BHRST), a developer in language-based AI, have soared 191% in 2023.
CloudWalk Technology also saw a meteoric boost with its shares up 98% year to date, while Hanwang Technology (118%) and TRS Information Technology (52%) were also uplifted by the frenzy.
However, following the Chinese government's warning and a blunder by Google Bard wiping out US$100bln of Alphabet (NASDAQ:GOOGL) shares, the Chinese stocks have begun to fall.
This isn’t the first-time investors in Chinese stocks have pushed share prices to new heights, the Chinese national financial newspaper, the Securities Times, said.
Augmented reality, virtual reality, 5G networks and anti-virus garments stocks all grew significantly in price as the concepts gained popularity.
However, as the hype fades so do stock prices, the Chinese paper stated.
“Some people avidly speculate on fake concepts, luring others into schemes of pumps and dumps. Investors eventually end up in tears so they should not follow,” said the Securities Times.
BHRST also warned stakeholders of the risks, following requests from regulators, saying its ChatGPT-style products don’t generate any revenue.
The company also reminded potential investors that it expects a 50% fall in 2022 net profits.
The AI company’s shares are down 2.9% today following the warnings, with CloudWalk falling by 9.5%.
Chinese tech company Baidu (NASDAQ:BIDU) announced earlier this week its plans to release “Ernie Bot” a direct rival to ChatGPT, leading to the company’s stock reaching an eleven-month high.
Though the state’s warning has seemingly lowered Baidu’s share price by 3.7% today.