Chinese State Media Warns Against Frenzy As ChatGPT's Popularity Boosts Local AI Stocks

China cautioned against a frenzy around the technology stocks after ChatGPT's growing popularity led to soaring share prices of China’s artificial intelligence (AI) stocks. 

What Happened: The Securities Times, in a front-page editorial, highlighted several technological concepts that previously spurred stock buying in China and the excitement for which has died down, reported Reuters.

The state-backed media said that though some hotly chased concepts have been successful, “many more new ideas haven’t been commercialized, or require more time to prove.” 

See Also: Benzinga Asks ChatGPT About Its Position As The #1 Place For Investing: Here’s What The Chatbot Told Us

“However, 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.”

Investors chasing local ChatGPT-concept stocks caught regulators’ attention after Beijing Haitian Ruisheng Science Technology Ltd shares soared as much as 217% this year.

At the same time, Hanwang Technology Co Ltd rose as much as 129%, CloudWalk Technology Co Ltd was up 128% and TRS Information Technology Co Ltd gained 66%.

After the state media's warning, Chinese stocks retreated on Thursday. 

The Chinese companies developing ChatGPT-like concepts also flagged risks at the regulator’s request after their stock prices shot up amid intense interest. Beijing Haitian Ruisheng Science Technology said its AI product and services do not yet generate revenue and clarified that it has no relationship with OpenAI.

Meanwhile, China's Baidu Inc. BIDU said its AI-powered service "Ernie Bot‘s" internal testing will complete in March.

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