Analysts are optimistic about Baidu’s latest iteration of its generative artificial intelligence model, Ernie 4.0, although investors were not pleased with the development.
Despite investors’ disapproval of the news, analysts are upbeat about Baidu’s most recent version of its generative AI model, Ernie 4.0. China’s largest tech company is Baidu.
As per market report, they reacted positively to the official launch of Ernie 4.0 and the announcement of multiple other new products. The “significantly improved” version of Ernie 4.0 was unveiled by Baidu on Tuesday.
The analysts maintained their “buy” rating for Baidu at a target price of $182 and stated that CEO Robin Li also announced the rebuilding of all apps within the Baidu ecosystem with deeper AI integration.
Li showcased Ernie 4.0’s capabilities at the company’s yearly flagship tech conference. It could be used to solve complicated math problems, plan a trip, make videos and posters and write a martial arts novel in real time.
The Jefferies analysts maintained a “buy” rating with a $216 price target in their report on Tuesday, citing a 3.6x improvement in the training algorithm as well as a notable improvement in [comprehension, generation, reasoning, and memory] capabilities in Ernie 4.0.
The GPT-4 model from ChatGPT maker OpenAI is comparable in capabilities to Ernie 4.0, according to the Chinese tech giant. According to Li, it is now on par with GPT-4 and has made significant improvements over the online version of the Ernie bot, which was presented to a group of analysts, investors, and journalists.
On March 16, Baidu made Ernie 3.0 available to a select group of users.
When Ernie 3.5 was released in June, the company said it performed better than ChatGPT and GPT 4 in a number of important categories.
It received government approval on August 30 and formally opened to the public.
The announcement by Baidu that it is now comparable to GPT-4 represents a noteworthy achievement for the massive Chinese tech company. Head of KraneShares’ international division Xiaolin Chen, said.
She did, however, note that different use cases and tasks can have varying effects on how effective AI models are.
To make a more thorough comparison with other models, Ernie would need to be assessed in a variety of application scenarios. Chen added that it’s important to keep in mind that comparing various AI models directly can be difficult because of the variety of testing procedures and benchmarks used.
Investor sentiment down
Investors, however, did not respond well to the news.
The Hong Kong-listed shares of Baidu closed 1.65% lower on Tuesday, underperforming the Hang Seng Index’s 0.75% gain. The company’s Nasdaq-listed shares fell 4.12%.
Kai Wang, senior equity research analyst at Morningstar Asia, wrote that they think investors are still worried about long-term issues like how Baidu will handle chip sanctions and other significant risks that could obstruct the company’s AI business from developing further. These issues were never brought up during CEO Robin Li’s presentation.
There was no new guidance for the business, Wang reported, so the conference focused more on showcasing the model’s capabilities than providing an update on Baidu’s AI business’s long-term strategic direction.
Ernie and ChatGPT, two large language models, require high-performance memory chips. These chips allow generative AI models to produce responses that are human-like by remembering specifics from previous conversations and user preferences.
The United States banned the export of additional AI chips, including the Nvidia H800, to China on Tuesday.
Washington strengthened regulations last week with the intention of preventing China from acquiring or producing advanced semiconductor chips. Washington worries that China could enhance its military prowess with the use of such advanced chips.
