Baidu slides after scripted Ernie Bot debut

Investors were bracing for China's definitive answer to ChatGPT, but what they got instead was a recorded screen walkthrough.

Baidu founder Robin Li took the stage in Beijing on Thursday to officially unveil Ernie Bot, the company's high-stakes generative AI chatbot. For a legacy search giant fighting to reignite growth, this was supposed to be a triumph. Instead of putting the system through its paces live, Li stood before the crowd and narrated over a pre-recorded, scripted video.

Wall Street and Hong Kong were not amused. Baidu's shares plunged 6.4% in Hong Kong, wiping out roughly $3 billion in market value in a single trading session.

Scripted demos and hard admissions

The launch was billed as a pivotal moment for China's tech landscape, showing how close domestic players are to matching OpenAI's breakout models. But the lack of any live interaction raised immediate skepticism.

Yu Yingbo, chief investment officer at Shenzhen Qianhai United Fortune Fund Management, didn't hold back. He pointed out that the presentation felt like pre-recorded clips and PowerPoint slides, lacking spontaneity. Baidu did not cite the database behind the system, detail its architecture, or show real head-to-head comparisons against ChatGPT.

Baidu opened registration for consumer and enterprise cloud access on Thursday, though it declined to say when users would actually get their hands on it.

To his credit, Li was surprisingly candid about the gaps. He told reporters that he could not claim Ernie Bot was fully ready, acknowledging that matching ChatGPT, let alone GPT-4, is a sky-high bar. He noted that among global tech giants, Baidu was the first to roll out an answer, even though his own testing proved the software is still far from perfect.

Industry pioneer Kai-Fu Lee weighed in as well, noting that while Chinese AI currently trails American rivals, the country's massive data reserves and track record of rapid deployment should help it close the gap over time.

Why it matters

We think Baidu chose to rush out an unfinished demo because sitting on the sidelines was simply not an option.

For users and developers, the debut is frustrating. You cannot actually stress-test Ernie Bot yet; you can only join a waitlist. When the world is already playing with raw AI outputs in real time, serving up scripted video interactions feels like a relic from the old corporate playbook.

For the broader industry, Baidu's move still forces the issue. By throwing Ernie Bot into the ring first, Baidu puts immense pressure on rivals like Alibaba and Tencent to show their cards. Claiming the title of the first major global tech incumbent to counter OpenAI carries strategic branding value, particularly for winning cloud contracts.

Yet the risk here is severe. Generative AI is a show-me-don't-tell-me market. When you skip the live demo, skepticism instantly fills the void. Baidu bought itself the first-mover spotlight, but its survival in this race now hinges entirely on what happens when real users finally get behind the keyboard.