Chinese technology company Baidu has denied allegations that its artificial intelligence chatbot, Ernie, is linked to Chinese military research. The denial comes in response to a report from Hong Kong newspaper South China Morning Post, which cited an academic paper from a university affiliated with the People's Liberation Army (PLA) cyberwarfare division. The paper claimed that the PLA division had tested its artificial intelligence system on Baidu's Ernie and on iFlyTek's Spark, both language-based AI chatbots similar to ChatGPT.

Following the release of the report, Baidu's Hong Kong-listed stock plunged by over 11.5% on Monday. In a statement, the company refuted the allegations, stating that it had not collaborated with the authors of the paper or their affiliated institutions. Baidu emphasized that Ernie Bot is available to and used by the general public, and any user interacting with such AI tools would have access to the same functions. Similar to ChatGPT, users can ask questions or make requests to Ernie Bot, which generates content based on the initial prompt. However, like other internet services in China, Ernie Bot is subject to censorship rules and will not answer politically sensitive or taboo questions as determined by the Chinese government.

The academic paper from the PLA Information Engineering University revealed that researchers had used Ernie Bot to generate simulated military response plans for Libyan troops in the event of a U.S. military attack. Baidu argued that the authors of the paper would have employed the same functions available to any user interacting with Ernie Bot. The South China Morning Post initially described a "physical link" between Ernie and the PLA division but later amended the reference to clarify that the PLA lab had tested its system on Baidu's AI model.

The decline in Baidu's stock price raised concerns among investors that Chinese technology firms associated with the Chinese military or government could face sanctions from the United States, similar to Chinese telecommunications giant Huawei. The U.S. views Huawei as an espionage risk. Tensions between China and the U.S. have escalated in recent years due to disagreements over trade, technology, and issues related to Taiwan, which China considers a renegade province to be taken by force if necessary.

Baidu, known for operating China's leading search engine and being one of the country's top artificial intelligence firms, released Ernie Bot to the public in August 2023. This move came as part of a competition among Chinese technology companies to develop a Chinese equivalent to ChatGPT. In December, Baidu announced that Ernie Bot had garnered over 100 million users.