Baidu Commits $140M Fund to Back ChatGPT-Like Startups

Baidu, Inc BIDU earmarked 1 billion yuan ($140 million) to finance Chinese startups that explore generative AI, marking the rush to tap the ChatGPT frenzy.
The company proposes to utilize the pool to incubate projects built atop its Ernie AI model in deployments of up to 10 million yuan apiece, Bloomberg reports.
Baidu and its VC partners will examine pitches from prospective founders who will use Ernie to build out their services.
Related: Apple Supplier Foxconn Rides the AI Wave, Doubles Down on Server Business Amid ChatGPT Frenzy
Baidu's ChatGPT counterpart Ernie Bot triggered a race from Alibaba Group Holding Ltd BABA to Tencent Holdings Ltd TCEHY and SenseTime Group Inc SNTMF to launch their rival platforms.
However, the ChatGPT frenzy also comes with its share of challenges. China's top internet regulator has said it will require security reviews of generative AI tools before implementation.
Also, the U.S. semiconductor embargo has 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.
Li launched Ernie Bot in March using a prerecorded demo, to the dismay of investors and analysts wishing for livelier interaction.
Price Action: BIDU shares traded lower by 0.73% at $122.72 premarket on the last check Wednesday.