• "We will embed Ernie bot into Baidu search first and we'll open it to the public in March," Baidu CEO Robin Li said Wednesday during an earnings call, according to a FactSet transcript.
• Baidu launched its Ernie project in 2019 and developed it "with well over 100 billion parameters," Li said, noting its China-culture specific strengths.
• Since Baidu is already the Chinese market leader in search, integrating it with Ernie bot won't help the company expand its market share, John Freeman, vice president of equity research at CFRA, said on CNBC's "Squawk Box Asia." "It's not a big as deal for them as it is for [Google parent] Alphabet."

BEIJING — Chinese tech giant Baidu said Wednesday its artificial intelligence product Ernie bot is set to open to the public next month.

The news comes as Microsoft-backed ChatGPT has skyrocketed in popularity for its ability to converse in a human-like tone, generating everything from content summaries to business proposals.

ChatGPT is not officially available in China, despite high local interest. Many Chinese companies, including Baidu, have announced they are developing similar tech.

"We will embed Ernie bot into Baidu search first and we'll open it to the public in March," Baidu CEO Robin Li said Wednesday during an earnings call, according to a FactSet transcript.

The company is working on "a revolutionary version of Baidu search built upon Ernie bot that incorporates generative AI into our search algorithm as well as content creation, and we are adding interactive features," he said. "Users will soon be able to interact directly with the new generative large language model."

Baidu operates the dominant search engine in China, where Google is banned. Worldwide, Google has nearly all of the global market in mobile search, while Baidu is second with a less than 1% share, according to Statcounter data for January.

It's unclear how Ernie bot's capabilities compare with ChatGPT's.

Baidu launched its Ernie project in 2019 and developed it "with well over 100 billion parameters," Li said, noting its China-culture specific strengths. "It is trained by serving billions of user search requests and other applications every day."

In artificial intelligence, parameters are a measure of how much a model has learned.

GPT-3, the predecessor to ChatGPT, has 175 billion parameters, according to a 2021 report from Stanford University. The report pointed out that was an exponential jump from GPT-2's 1.5 billion parameters.

An OpenAI spokesperson said the company could not speak for Baidu regarding its models and parameters.

The quality of AI-generated content remains a question for businesses.

OpenAI said in a blog post this month that ChatGPT "users have shared outputs that they consider politically biased, offensive, or otherwise objectionable." The U.S. startup said that in many cases it agreed, and was working to improve ChatGPT.

In China, government efforts to control data and public information may affect how ChatGPT-like tech develops in the country, analysts pointed out. Beijing has also emphasized building up self-sufficiency in technology.

Nikkei Asia on Wednesday reported, citing sources, that regulators told Tencent and Alibaba-affiliate Ant Group not to offer access to ChatGPT services on their platforms, either directly or via third parties.

The article added, citing sources, that tech companies in China will need to communicate with regulators before launching their own ChatGPT-like services.

The report did not specify which regulators. China's cybersecurity regulator, Baidu, Tencent and Ant did not immediately respond to requests for comment on the Nikkei report.

It's not uncommon for businesses, especially those operating in sensitive sectors, to communicate with Chinese regulators.

Despite widespread assessments that ChatGPT is transformative for tech, businesses don't have a clear path to monetization yet.

Since Baidu is already the Chinese market leader in search, integrating it with Ernie bot won't help the company expand its market share, John Freeman, vice president of equity research at CFRA, said on CNBC's "Squawk Box Asia." "It's not a big as deal for them as it is for [Google parent] Alphabet."

He has a sell rating on Baidu.

However, Freeman said he was "really impressed" with how quickly Baidu's algorithms were able to perform, especially when transforming text to video.

For Ernie bot, public partnership announcements include Baidu-backed video streaming platform iQiyi's plans for connecting to the bot for search and AI-generated content. Baidu-backed electric car startup Jidu — which is set to start deliveries this year — also said it plans to incorporate Ernie bot.

Baidu's Li said Wednesday that "ChatGPT-types of features could potentially become a new traffic entry point for internet users and, therefore, expand the market size of search," he said. "Meanwhile, it will also help our advertisers, our content creators and merchants."

He added that AI-generated content will help Baidu "accumulate more short videos on our platform over time. And a direct benefit would be increasing video viewership and ad revenue."

Total revenue for 2022 fell by 1% to 123.68 billion yuan ($17.93 billion), according to a company release.

Despite little change in the company's revenue in the fourth quarter from a year ago, Freeman pointed out that operating margin expanded.

"That tells you intrinsically it's a really healthy business," he said. "These companies are springloaded if we see a change in the environment."