The article discusses the significant market impact following the launch of Baidu’s AI chatbot, Ernie Bot, in China. Nvidia and Microsoft shares experienced notable declines after the announcement that Ernie Bot would not use Nvidia’s advanced AI chips, instead opting for Chinese-made semiconductors. Nvidia’s stock dropped 3.7%, while Microsoft saw a 2.1% decrease. This development represents a potential shift in the AI chip market, particularly in China, where domestic alternatives are gaining traction. The article highlights how Ernie Bot’s decision reflects broader geopolitical tensions and trade restrictions between the US and China, especially in the technology sector. The move is particularly significant given Nvidia’s dominant position in the AI chip market, where it holds approximately 80% market share. The situation underscores China’s push for technological self-reliance and the potential implications for US tech companies that have historically dominated the global AI infrastructure market. The development also raises questions about the future of international AI chip supply chains and market dynamics. This event is seen as a potential indicator of changing patterns in the global AI industry, where regional players might increasingly opt for domestic solutions, potentially affecting the market position of established US tech giants.
Source: https://abcnews.go.com/Business/nvidia-microsoft-shares-tumble-china-based-ai-app/story?id=118136157