China’s ChatGPT Stance Could Mean New Challenges for AI Stocks

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  • U.S. artificial intelligence (AI) stocks could be in for a battle with China for dominance over the sector.
  • The Chinese government is beginning to clamp down on the use of American AI tech within its borders.
  • Meanwhile, Chinese tech giants are preparing their own tools to compete.
AI stocks - China’s ChatGPT Stance Could Mean New Challenges for AI Stocks

Source: shutterstock.com/Peshkova

Artificial intelligence (AI) has been seen as the technology of the future since the 1950s when it was first theorized. Since then, the market for AI technology has plodded along in growth, and tons of debate about the related ethics has been brought into the fold. Now, it seems that the world is starting to embrace AI in news ways. While the conversation is now shifting toward whether this is a fad or here to stay, AI stocks are seeing a boom. They might find new challenges in the near future, though, as China takes a new stance on the tech.

It’s no secret the Chinese market is important for tech companies. The nation is America’s biggest competitor in the race for the most impressive new technologies. And, as the most populated nation, it’s a massive source of potential for companies.

The battle between China and the U.S. for dominance in tech is fierce. As a result, both nations are loathe to allow their adversary’s companies to tread on their home soil. Mistrust in Chinese tech by U.S. lawmakers has led to attempts to ban ByteDance’s TikTok on all U.S. devices. This race has also led to a stand-off around microchip imports and exports between the two.

The fissure in U.S.-China relations continues to run deeper, as well. The controversy over a Chinese balloon spotted over the U.S. has dominated headlines. Chinese outlets accuse the U.S. of doing the same. Similarly to the tech conflicts, these stories all trace back to fears of each country spying on the other. As it turns out, AI is no different.

AI Stocks Likely to Battle With Chinese Competitors

AI stocks have been flying high for the first months of 2023. But, there is evidence the market’s biggest bout of adversity is yet to come. China is choosing to clamp down on access to American AI technology. Moreover, Chinese tech competitors are planning on rolling out their own models.

OpenAI’s ChatGPT chat bot is taking the entire world by storm. It’s a sophisticated tool one can ask almost anything. It can write stories, code programs and break down highly complex subjects in succinct explanations.

Reports on Thursday say that the Chinese government is clamping down on access to the ChatGPT website within its borders. While the Guardian points out the website was never explicitly allowed before, regulators are starting to have third-party platforms which enable access to the site taken down. A slew of apps are opting to remove access themselves.

The ban doesn’t come as a surprise given China’s fraught relationship with the U.S. Companies in the country have been developing their own alternatives to ChatGPT and other chat bots. As the launch of these tools near closer, it makes sense for the Chinese government to steer Chinese users toward these tools. Earlier this week, Chinese tech giant Baidu (NASDAQ:BIDU) announced plans for its own chat bot called Ernie. Ernie is expected to launch in March on Baidu’s browser.

On the date of publication, Brenden Rearick did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.


Article printed from InvestorPlace Media, https://investorplace.com/2023/02/chinas-chatgpt-stance-could-mean-new-challenges-for-ai-stocks/.

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