© Reuters. The ChatGPT logo is seen in this illustration taken February 3, 2023. REUTERS/Dado Ruvic/Illustration/Files
SHANGHAI (Reuters) – Chinese artificial intelligence stocks are all the rage in mainland Chinese markets as the global frenzy surrounding the Microsoft-backed chatbot ChatGPT fuels speculative bets on the revolutionary computing technology.
Just two months after its launch, ChatGPT, which can generate articles, essays, jokes and even poetry in response to prompts, has been called the fastest growing consumer app ever. That has prompted Google owner Alphabet (NASDAQ:) Inc to plan its own chatbot service and use more artificial intelligence for its search engine.
While ChatGPT is not accessible in China, investors from the mainland continue to surge shares of AI technology companies such as Hanwang Technology Co, TRS Information Technology Co, and Cloudwalk Technology Co.
The CSI AI Industry Index, which includes larger-cap companies such as iFlytek Co, is up 17% this year, outpacing the benchmark CSI300 index’s 6% gain.
There is certainly no indication that these AI companies are close to launching a product similar to ChatGPT. The closest seems to be search engine giant Baidu Inc (NASDAQ:) with plans to complete testing of its “Ernie bot” in March. Its shares rose more than 15% on Tuesday after making the announcement.
“The industry as a whole tends to first speculate on expectations before trading on actual results,” said Zhang Kexing, general manager of Beijing Gelei Asset Management.
Shares of Hanwang Technology, which makes products that enable smart interactions, rose to their daily limit of 10% on Tuesday, the seventh straight session to hit that limit since markets reopened after the Lunar New Year holiday, raising prices in more than 60%. so far in February.
The company expects to report an annual loss by 2022, but believes it has an advantage over an interface like ChatGPT because its model can produce more accurate results for customers.
Cloudwalk shares fell 5.5% on Tuesday but have nearly doubled in the seven trading days since the Lunar New Year holiday. On Tuesday, the company warned investors, saying its losses deepened in 2022, it has not cooperated with OpenAI, and it has not generated revenue from ChatGPT-related services and products.
Other companies that have revealed their progress in AI technology include TRS Information Technology and Beijing Haitian Ruisheng Science Technology Ltd. Their share prices have also skyrocketed.
Rising prices have stretched valuations. TRS, for example, is trading at almost 60 times earnings, while Haitian Ruisheng’s price-earnings ratio is more than 240.
Retail investor Lu Deyong has bought shares in TRS and iFlytek and is looking to cash in on the ChatGPT hype.
“ChatGPT is just a good idea,” he said. However, he does not believe that “China will be able to realize such a technology any time soon.”
“For us retail investors, we prefer smaller stocks with this concept to make a quick buck,” Lu said.
