Chinese tech stocks slid today following a suite of new rules from China’s internet regulator on how to use artificial intelligence ( ) in the country. Companies like Alibaba (NYSE:BABA), JD.com (NADAQ:JD) and PDD (NASDAQ:PDD) all closed well in the red alongside most market indices.
What’s going on with Chinese tech stocks today?
Well, on Tuesday, the Cyberspace Administration of China suggested some new AI policies in the country. These include requiring companies in China get a “government security review” before being allowed to provide AI services. The proposed regulation would also hold companies liable for the content their AI creates.
In a foreboding coincidence, on the same day, Alibaba held its 2023 Alibaba Cloud Summit. The company showed off its new ChatGPT-style AI chatbot called Tongyi Qianwen. The company revealed plans to incorporate its new language-model AI tool into all of its products.
Alibaba is not alone, however. A number of other Chinese companies have jumped headfirst into AI recently, including JD.com and Baidu (NASDAQ:BIDU). It seems the record-breaking popularity of OpenAI’s chatbot has spawned a new industry out of thin air, something Chinese regulators are attempting to stay ahead of.
Chinese Tech Stocks Slide on AI Regulation
China’s proposed regulation has put a legitimate damper on many Chinese tech giants. PDD stock closed today in the red by about 5% while BABA stock closed down by roughly 6%. Meanwhile, JD stock appears to have endured the gravest losses. Shares ended the day by slumping 7.5%.
AI is projected to be a multi-billion dollar industry in the country, so it makes sense that China’s tightening regulatory collar has some investors concerned.
Yahoo Finance’s Chinese Tech and Internet Stocks watchlist is in the red by about 4%.
On the date of publication, Shrey Dua 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.