Shares of the Chinese Internet giant Baidu plummeted by 12% following reports of its artificial intelligence platform’s connection to the Chinese army. Additionally, it was revealed that China’s armed forces had found a way to bypass American sanctions to purchase NVIDIA graphic processors.
According to South China Morning Post, Chinese scientists working on military projects utilized the Baidu chat bot to teach experimental military tactics and interact with unpredictable human opponents. The Iflytek chat bot spark was also reportedly used for this purpose.
Investors reacted strongly to the news, causing a significant drop in Baidu’s stock value. Concerns arose that the United States may impose sanctions on the Chinese Internet company. However, Baidu told SCMP that it had no knowledge of such research projects and denied any connections with the scientific institution conducting these activities.
The military AI in question has the capability to process sensor data and battlefield information, converting it into descriptive text or images for chat bots. Its objective is to assist individuals in making decisions during combat situations. The United States has been attempting to restrict similar military projects involving AI by tightening rules on the export of advanced technologies to China.
Baidu clarified that its scientists simply utilized public APIs available to any user. The company aimed to distance itself from any claims of involvement with the Chinese army.
In addition, Reuters reported that despite the US ban on exports, Chinese military departments and state research institutes of AI managed to purchase NVIDIA products over the past year. They acquired graphic processors A100 and H100 through little-known Chinese suppliers. The exact means by which they obtained the NVIDIA products remain unclear, as neither the company itself nor its official partners were involved.
The A100 and H100 are among NVIDIA’s most advanced products for accelerating data processing. The Biden administration had already prohibited their sale to China, and in October 2022, the restrictions were extended to less productive models like the A800 and H800.
Among the recipients of the NVIDIA graphic processors are several elite universities, as well as the Harbin Technological Institute and the University of Electronic Science and China Technology. These organizations face American export restrictions due to alleged ties with the military.
NVIDIA stated that it complies with all applicable export control laws and expects the same from its partners. The company representative emphasized that if any client is found to have illegally resold its products to third parties, appropriate actions will be taken.