Baidu (NASDAQ:BIDU) stock fell 7% on Monday after the SCMP reported that scientists from the PLA's Strategic Support Force reportedly tested Baidu's Ernie and iFlyTek's Spark, large language models (LLMs), in military simulations.
The research paper, published by these scientists in December, detailed the utilization of LLMs in military contexts.
The stock is down a further 4.5% in pre-market Tuesday.
Baidu, however, denies any affiliation or collaboration, asserting no tailored services were provided to the researchers. The company emphasized its lack of knowledge about the research project, stating that if its LLM was used, it would have been the publicly available version.
The reported military application of these language models raises concerns about the dual-use nature of advanced AI technologies.
Analysts at Citi said the market “likely overreacted” to the SCMP article.
“We think the market perceived a potential risk that Baidu could face an overhang from any association/cooperation with Chinese military entities,” analysts said in a note.
“Amid fragile market sentiment, we believe the market likely overreacted to the news article.”