Artificial intelligence (AI) has taken the world by storm and has become one of the most exciting and lucrative investment opportunities of the 21st century., In recent years, AI-linked stocks have gained immense popularity, particularly in China, where investors have been flocking to AI stocks such as Beijing Haitian Ruisheng Science Technology Ltd ,(BHRST), CloudWalk Technology,, Hanwang Technology, and TRS Information Technology. However,, the recent warnings from the Chinese government and some technical blunders by leading tech companies have caused the AI stocks to experience a significant decline in the stock market.
Understanding the Rise of Chinese ChatGPT-style AI Stocks
Investors around the world have been investing in AI-linked stocks as they believe that AI technology is the future and has the potential to bring in significant profits. In China, the ‘ChatGPT-style AI stocks ,have been growing rapidly, with BHRST experiencing a 191% increase in its shares and CloudWalk Technology up 98% year-to-date. The rapid growth of these stocks has been driven by the popularity of ChatGPT and other AI-powered technologies.
The Influence of Hype and Popularity on Stock Prices
The Chinese national financial newspaper, the Securities Times, has stated that the recent growth of Chinese AI stocks is not an isolated phenomenon. Augmented reality, virtual reality, 5G networks, and anti-virus garment stocks have all experienced significant growth as these concepts have gained popularity. However, .as the hype fades, so do the stock prices. The Securities Times has warned investors to be cautious and not to blindly follow the hype, as some individuals engage in “pump and dump” schemes, luring others into investing in fake concepts, and leaving them with significant losses.
The Government Warning and the Impact on AI Stocks
The Chinese government has recently issued a warning about the risks associated with investing in AI-linked stocks, particularly ChatGPT-style AI stocks. The government has stated that some of these stocks, including BHRST, do not generate any revenue and are not profitable. BHRST, following requests from regulators, has also issued a warning to its stakeholders, reminding them that the company expects a 50% fall in 2022 net profits. These warnings have led to a decline in the stock prices of BHRST and other AI stocks, with BHRST down 2.9% and CloudWalk falling by 9.5%.
The Impact of Technical Blunders on AI Stocks
In addition to the government warnings, technical blunders by leading tech companies have also had a significant impact on AI stocks. For example::- “Google Bard’s recent blunder wiped out US$100 billion of Alphabet shares, causing a significant decline in the stock market. These technical errors have made investors wary of investing in AI stocks and have contributed to the recent decline in their stock prices.
The Future of Chinese ChatGPT-style AI Stocks
In conclusion, the recent rise and fall of Chinese ChatGPT-style AI stocks have shown the significant impact that hype and popularity can have on stock prices. The warnings from the Chinese government and technical blunders by leading tech companies have contributed to the decline of these stocks. However,, it is important to remember that AI technology is still in its early stages and has the potential to bring in significant profits in the future. As such, investors should be cautious and conduct thorough research before investing in AI stocks.
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