Baidu Bruised By Markets Skittish About Misleading Newspaper Report

A story in Hong Kong’s South Morning China Submit, citing an obscure research paper linked to the Chinese language army, wrongly prompt that Chinese language AI large, Baidu, is working with the Chinese language army, setting off a rout within the firm’s inventory.

Actually, the researchers who wrote the paper solely used Baidu’s giant language mannequin, Ernie Bot, in the identical method that any public consumer would. The newspaper issued a correction, however a lot of the harm was already performed: Baidu misplaced an estimated $4.68 billion in market capitalization on the Hong Kong Inventory Alternate on Monday, presumably over fears that Baidu may face US sanctions for working with the army, as has Chinese language telecommunications large Huawei.

“Baidu has not engaged in any enterprise collaboration or offered any tailor-made service to authors of the educational paper or any establishments with which they’re affiliated,” Baidu mentioned in a statement. The corporate’s main itemizing is on the NASDAQ inventory alternate.

Nonetheless, the incident highlights the issue that tech firms face in protecting a distance from their nationwide militaries whereas growing and deploying dual-use applied sciences corresponding to generative AI.

Google confronted a backlash a number of years in the past when it participated in Challenge Maven, a program to develop pc imaginative and prescient for army drones, finally ending its involvement beneath public stress – although it has quietly continued to cooperate with the army and intelligence institution.

Most lately OpenAI has quietly amended its usage policies, deleting “army and warfare” from an inventory of prohibited makes use of of its expertise.

U.S. firms have the choice to withhold proprietary expertise from the federal government. However in China, it isn’t as clear, placing Chinese language firms – notably these listed on U.S. inventory exchanges – in a dangerous place.

Tech firms maintain the mental property and experience to develop and deploy these highly effective programs which might be inherently twin use and of great curiosity to their nationwide militaries.

U.S. legal guidelines governing dual-use expertise, which has each civilian and army purposes, has lengthy targeted on limiting proliferation fairly than U.S. authorities or army entry to proprietary expertise. Nevertheless, most lately, the Biden Administration’s October 2023 Government Order on the Protected, Safe, and Reliable Improvement and Use of Synthetic Intelligence mandated that firms present the federal authorities, on an ongoing foundation, with “info, reviews, or information relating to any ongoing or deliberate actions associated to coaching, growing, or producing dual-use basis fashions.”

For years, the US was seen at a drawback to China as a result of US companies can’t be compelled to cooperate with the army. Nevertheless, China’s ‘military-civilian fusion’ coverage (MCF), whereas undeveloped in legislation, leaves Chinese language firms susceptible to US sanctions as a result of they’ve issue convincing the US that they’ll refuse to cooperate with the Chinese language army.

However the Heart for a New American Safety, a Washington, D.C.-based bipartisan suppose tank that conducts in-depth analysis and evaluation on nationwide safety and protection insurance policies, present in 2021 that the Chinese language coverage has been usually misunderstood and oversimplified by US commentators. “There is no such thing as a express authorized obligation for Chinese language firms to take part in MCF,” the report acknowledged.

Baidu, whose main enterprise is its search engine, just isn’t corresponding to Huawei. Nonetheless, that is the context of the South China Morning Submit article and its subsequent affect on the Chinese language tech firm. The newspaper report, revealed on January 12, alleged that Chinese language army researchers linked their “army AI” to business giant language fashions together with Baidu’s Ernie Bot – China’s main challenger to OpenAI’s ChatGPT.

The newspaper later corrected the report, saying that its unique declare {that a} Chinese language army lab “had solid a bodily hyperlink between its Al system and Baidu’s Ernie” was incorrect and that “there isn’t a devoted line between the 2.”

However the newspaper report had deeper issues, according to Pekinology, an ostensibly unbiased e-newsletter that follows US-China relations, edited by a former correspondent for Xinhua, the Chinese language state information company, who’s now a analysis fellow on the Heart for China and Globalization, a number one non-government suppose tank in China.

Pekinology systematically debunks the newspaper report, explaining that it misrepresents the content material and implications of the Chinese language paper. For instance, whereas the newspaper means that the military-linked analysis lab had constructed a “army AI” that used Ernie Bot for battlefield evaluation, it’s clear from the lab’s paper that it was solely proposing such an AI system and that no such system exists.

Furthermore, the researchers’ use of Ernie Bot consisted of prompting the general public mannequin and recording the mannequin’s responses – one thing that anybody in China can do.