By Ambar Warrick

-- Chinese internet firm Inc (NASDAQ:) on Monday canceled a planned livestream for the launch of its artificial intelligence-driven ChatGPT rival “Ernie bot,” opting instead for closed-door meetings, which saw its Hong Kong shares tumble. 

The search engine firm said in a statement on Monday that it had opted for closed-door meetings with companies that were testing the product, and had canceled a planned webcast. The firm said it was facing “strong demand” from 120,000 companies that had lined up to test the Ernie bot, and that it will hold multiple closed-door meetings to test the bot.

Baidu’s Hong Kong shares (HK:) fell as much as 5%, and were down 3.1% at HK$149.60 as trading resumed after the midday break. The broader index was down 0.9%.

Ernie bot, which is intended to rival the likes of OpenAI’s ChatGPT, saw a limited launch earlier this month to a somewhat mixed reaction from investors. Baidu’s shares had initially plummeted after the launch, which was a pre-recorded session with CEO Robin Li. But positive anecdotes from research firms that tested the bot triggered a delayed rally in Baidu’s shares.

Analysts say that China’s attempts to make an AI similar to ChatGPT are expected to be hampered by the country’s tight internet controls, which limit the amount of information available to chatbots.

But the Chinese government has outlined plans to support AI development, with Baidu’s regional rivals including Alibaba Group Holding Ltd (HK:), Tencent Holdings Ltd (HK:), and Huawei all working on their own versions of the technology.

Baidu had revealed plans for an artificial intelligence-driven chatbot earlier this year, amid the increasing popularity of generative AIs sparked by the launch of OpenAI’s ChatGPT. OpenAI is backed largely by Microsoft Corporation (NASDAQ:), which intends to refine and adopt the technology in its suite of office software.