Baidu Inc. plunged its most in more than a year after a report linked its Ernie AI platform to key military research, spurring concerns about retaliation from Washington. The search engine firm, generally considered one of China’s leaders in artificial intelligence development, fell 11.5% Monday despite publicly denying the relationship. Traders in Hong Kong cited a South China Morning Post report about how a university affiliated with the People’s Liberation Army’s Strategic Support Force — which oversees cyberwarfare — had tested its AI system on Baidu’s ChatGPT-like Ernie. Baidu on Monday denied any affiliation or partnership with the institute. But the report about the hook-up with the PLA raised concerns that Washington may consider imposing sanctions on Chinese firms to curtail such collaboration, as part of efforts to contain its geopolitical rival. Users in Hong Kong and Taiwan got a “404” error when trying to access an online link to the institute’s research paper on the matter, though it was accessible still from mainland China. The newspaper itself updated its article to remove a reference to a “physical link” between Ernie and the PLA affiliate, without explanation. “Baidu has no affiliation or other partnership with the academic institution in question,” a company spokesperson said in a statement. “We have no knowledge of the research project, and if our LLM was used, it would have been the version publicly available online.” Baidu in 2023 debuted Ernie — the country’s earliest answer to OpenAI’s ChatGPT — jumping to the forefront of a nationwide development frenzy that’s caught up dozens of startups and most tech leaders from Tencent Holdings Ltd. to Alibaba Group Holding Ltd.

Full report : Baidu’s stock drops 10%+ after an SCMP report linking Ernie AI platfrom, which Baidu said amassed 70 million users within three months of launch, to Chinese military research