(Yicai Global) April 10 -- Artificial intelligence stocks, including those of iFlytek and 360 Security Technology, fell by their daily limits on Chinese mainland exchanges after a newspaper affiliated with the State Council, China’s cabinet, warned of a bubble in the wake of the AI chatbot craze.

Shares of iFlytek [SHE: 002230] closed down 10 percent at CNY58.95 (USD8.57), while 360 Security [SHA: 601360] also fell 10 percent to end at CNY16.74. Since Feb. 1, iFlytek’s stock has climbed by 45 percent, while 360’s have soared by 139 percent.

Meanwhile, Kunlun Tech [SHE: 300418] tumbled 17.3 percent to CNY41.79, Beijing Haitian Ruisheng Science Technology [SHA: 688787] slumped 15.3 percent to CNY177 (USD25.73), and BlueFocus Intelligent Communications Group [SHE: 300058] sank 13.9 percent CNY7.90 (USD1.20).

The ChatGPT concept sector is showing “signs of a valuation bubble,” the Economic Daily said in a commentary today. The entire sector’s price-to-earnings ratio had been as high as 13,600 percent as of April 6, it said.

Share prices have surged even though ChatGPT is still in its infancy in terms of application scenarios and commercial exploration and some firms have not achieved significant technical breakthroughs, with many in the red, the paper added.

So suspected hype cannot be ruled out, it said, calling on government departments to enhance monitoring and crack down on hyped concepts and share price manipulation.

360 Security announced yesterday that its AI product matrix 360 Zhinao, developed based on the 360GPT big model, will be open for business clients for alpha testing on April 16.

IFlytek will introduce a cognitive intelligence-based smart big model on May 6, Vice President Liu Cong said recently, adding that it will be used for research and development as well as applications in various industrial sectors.

IFlytek’s 2022 net profit may have fallen 60 percent to 70 percent to between CNY467 million and CNY623 million (USD67.9 million and USD90.6 million) last year, the Hefei-based firm said on Jan. 30. Net profit minus non-recurring profit or loss may have declined 45 percent to 60 percent to between CNY392 million and CNY538 million.

Editor: Peter Thomas