Baidu creates US$140 million fund to back ChatGPT-like startups

BAIDU has set aside 1 billion yuan (S$191 million) to fund Chinese startups that explore generative AI, joining a global investment wave keen on riding a frenzy around ChatGPT-like services.

China’s Internet search leader will use the pool to incubate projects built atop its Ernie AI model, in deployments as high as 10 million yuan apiece, Baidu said in a statement on Wednesday (May 31). Venture investors including IDG Capital will take and judge pitches from founders, who then build demo products before receiving a verdict on whether they get seed funding, Baidu said.

The incubation programme twins one of China’s most prominent startup investment firms with the perceived domestic leader in AI development. It’s another example of China’s headlong rush into AI investment, after OpenAI’s ChatGPT debuted to a media firestorm in November.

Baidu delivered the country’s first major riposte to ChatGPT, called Ernie Bot, igniting a race by rivals from Alibaba Group Holding to Tencent Holdings and SenseTime Group to unveil rival platforms. Baidu and its VC partners will examine pitches from prospective founders who’ll use Ernie to build out their own services.

“Large-language models will give birth to AI-native applications,” billionaire Baidu founder Robin Li said at an event last week when he announced an upgrade to Ernie. “Baidu will become the first company to rework all of its products. It’s not about integrating or accessing AI. It’s about rework and restructuring.”

It’s still too early to tell whether Ernie Bot could rise to the level of “killer apps” like Tencent’s ubiquitous WeChat. China’s top Internet regulator has said it will require security reviews of generative AI tools before they can be put into action. And US sanctions have deprived Chinese tech firms of the best chips to train their AI models, which could widen gaps between services like Ernie Bot and their Western counterparts.

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In March, Li introduced Ernie Bot using a prerecorded demo, underwhelming investors and analysts who were hoping for livelier interaction. The Chinese chatbot subsequently scored positive reviews among selected testers, but its shares are still down roughly 20 per cent from a February high. BLOOMBERG