A New ChatGPT Rival is Being Developed by Alibaba

As the latest tech giant to dive into chatbots by developing software such as ChatGPT, Alibaba BABA -0.78% is the latest company to make a move into artificial intelligence.

‍

This is amid heightened interest in generative AI technology in 2023, which includes Microsoft MSFT +1.23%, Google GOOG +1.23%, and Baidu BIDU -4.96%.

‍

Alibaba's (ticker: BABA) investors may be cheering the Chinese tech giant's decision to develop a public-facing AI chatbot, with the company's shares jumping 2% in premarket U.S. trading following the announcement.

‍

A ChatGPT-style tool has been developed by Alibaba, and the company is currently putting it through internal testing as part of its internal testing process.

‍

“We have focused our efforts on developing cutting-edge technologies such as large language models and generative AI since the formation of DAMO [investment in research & development] in 2017,” according to an Alibaba spokesperson. “As a technology leader, we will continue to invest in turning cutting-edge innovations into value-added applications for our customers as well as their end-users through cloud services.”

‍

As part of its "Academy for Discovery, Adventure, Momentum, and Outlook," Alibaba launched its "Academy for Discovery, Adventure, Momentum and Outlook" in 2017 with the aim of investing more than $15 billion over the next three years in the research and development sector. Alibaba, like Baidu, is another Chinese tech giant with a history of innovation that is increasingly pivoting to high-growth areas that are influenced by artificial intelligence. In addition to being at its core an e-commerce company, Alibaba also has a thriving cloud computing business, which is an area of the group that is leading its push into the world of high technology.

‍

There has been a huge interest in generative AI among investors and the public at large since OpenAI's ChatGPT tool was launched late last year and has since become one of the fastest-growing tools in the world. According to an analysis by Trade Algo, the number of users of natural language chatbots exceeded 100 million in the month of January, making it one of the fastest-growing consumer technologies in history in terms of their adoption.

‍

It seems that ChatGPT's quick success has sparked an AI arms race in which Microsoft (MSFT), which is heavily invested in open AI, is hoping to use it to shake up the web search market as a result of its rapid success. There have also recently been announcements that Google parent Alphabet GOOGL –7.44% (GOOGL) and Chinese tech giant Baidu (BIDU) will be releasing their own chatbots in the near future.

‍

This jump in Alibaba's stock on Wednesday-probably prompted by the AI news-is indicative of an investor frenzy over chatbots that shows few signs of abating anytime soon, with even the speculative realm of cryptocurrencies following suit in its own way.

‍

The field of artificial intelligence represents a promising market for growth, but investors would do well to take heed as this wave of optimism nears the point where it becomes a bubble rather than a market.