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Chinese tech companies call for caution as ChatGPT fervour heats up, warning they are nowhere close to profitability in this field
- Companies such as Beijing Deep Glint Technology, 360 Security Technology and CloudWalk are reining in expectations in the market
- Some market watchers are drawing comparisons between the rally in China’s ChatGPT-driven shares and the blockchain mania which fizzled out
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The fast and furious rally in China’s ChatGPT shares looks set to fade as tech firms caution they are nowhere close to turning a profit in this field.
Beijing Deep Glint Technology Co stumbled as much as 10.2 per cent before ending flat on Monday after the company said it does not have the capability to offer ChatGPT-linked products.
That may be a foretaste of what is to come even as firms such as Cambricon Technologies Corp and TRS Information Technology Corp jumped over 5 per cent to extend their recent gains.
Caution toward artificial intelligence-related shares is setting in after investors rushed to capitalise on what is being billed as a watershed development for the tech industry. Some market watchers are warning that the hype is not supported by fundamentals, drawing comparisons between the rally and the blockchain mania which fizzled out after a bout of heady gains.
“In most cases it’s not immediately clear what the financial benefits are,” said Vey-Sern Ling, managing director at Union Bancaire Privee. “Apart from the companies with the strongest technical capabilities, most of the rest are probably just riding the wave. Such hype-driven rallies are never sustainable.”
Beijing Deep Glint is not the only company that is reining in expectations relating to ChatGPT. 360 Security Technology said on Friday that there is “major uncertainty” on the release date and output of such services, three days after its shares posted the biggest daily surge since November 2020.
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