Chinese state media, AI companies warn of risks in ChatGPT stock frenzy

SHANGHAI  – Chinese state media on Thursday cautioned against risks in chasing ChatGPT-concept stocks, while artificial intelligence (AI) companies urged investors to be rational after their soaring share prices caught regulators’ attention.

Frenzy around the ChatGPT chatbot has spurred speculative bets in China’s stock market, pumping up AI firms such as TRS Information Technology Co Ltd, Hanwang Technology Co Ltd and CloudWalk Technology Co Ltd.

ChatGPT, developed by OpenAI and backed by Microsoft Corp, gives strikingly human-like responses to user queries.

The Securities Times in a front-page editorial highlighted several technological concepts that spurred stock buying in China, such as fifth-generation telecommunications networks (5G), augmented reality (AR), virtual reality (VR) and anti-virus garments – the excitement for which has died down.

Though some hotly chased concepts have been successful, “many more new ideas haven’t been commercialised, or require more time to prove,” the state-backed newspaper said.

“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.”

Companies developing ChatGPT-like concepts have also flagged risks at the request of regulators after their prices shot up amid intense interest in generative AI – technology that can generate new data and media such as text and images.

Beijing Haitian Ruisheng Science Technology Ltd said its ChatGPT-style products and services do not yet generate revenue, and that it has no relationship with OpenAI.

Though such technology “is on a long-term uptrend, we need to analyse its speed of growth, and effect, in a cool-headed way,” it said in a filing in response to queries from the Shanghai Stock Exchange.

The company said it expects a roughly 50 percent slump in 2022 net profit, and admonished investors to be cautious as its valuation is currently much higher than the industry average.

360 Security Technology Co Inc, in response to regulators’ queries, said its self-developed ChatGPT-related technology is still at a nascent stage and is used only internally as a productivity tool.

It is uncertain about when it can market ChatGPT-style products, and how effective they will be, so “we advise investors to pay attention to market trading risks, decide rationally, and invest cautiously.