(Yicai Global) March 16 -- Baidu's stock price dropped after the search engine giant invited users to test Ernie Bot, a Chinese equivalent of ChatGPT, a chatbot developed by American research laboratory OpenAI.

Baidu's Hong Kong-listed equity [HKG: 9888] declined by 6.4 percent to close at HKD125.10 (USD15.90). Its New York-listed shares [NADSAQ: BIDU] were 5.1 percent down at 6.54 p.m. after closing 2.6 percent lower yesterday.

Ernie Bot will be open to an initial group of users with invitation codes and will soon be made available to more users, said Baidu. It also offers access of the chat bot via Baidu Cloud to serve enterprise clients. Since February, over 650 enterprises have joined the ecosystem of Ernie Bot.

The tech company welcomes public feedback as it unveiled Ernie Bot today because of market needs, Robin Li, founder, chairman and chief executive of the Beijing-based company, said during the launch ceremony. The chatbot was demonstrated in a range of areas, including understanding Chinese language and culture, generating literary and business writing, performing complex mathematical calculations, and producing multi-modal content, while the demonstration was recorded.

Baidu's product lines, including browser, smart cloud, autonomous driving, and voice assistant Duer, as well as Baidu's partners, have demand for big language models. Moreover, real human feedback can help accelerate product iteration, per Li.

However, Baidu is not quite ready to launch the chatbot now, since the threshold of  taking on ChatGPT-4, the latest version of the American transformer, is very high, according to Li. "I felt there are many imperfections in internal tests." Ernie Bot is not a tool for technology confrontation between China and the US, he said. Instead, Baidu is seeking to become a platform serving users and many industries. 

OpenAI is widening the gap between the first-mover and subsequent rivals as the Microsoft-backed organization added image input to the latest model yesterday. An industry insider said after the Baidu event that based on the demo, Ernie Bot managed to correctly answer questions and finish the corresponding tasks. "But there is no big surprise compared to ChatGPT-4." 

Lu Guannan, analyst at London-headquartered consultancy Forrester, said to Yicai Global that American and Chinese firms will have a hard time catching up both in terms of technology and business model with OpenAI which has been protective about technical information. But in the long run, Chinese companies can still narrow the gap, particularly after specific application scenarios are developed.

Editors: Zhang Yushuo, Emmi Laine, Xiao Yi