Wen Xin's words are fully open: accumulate and eventually take off

Reinventing the digital world.

On August 31, China's first large-language model "Wen Xin Yiyan" was first fully opened to the whole society.

In the following 12 hours, the Wen Xin Yiyan APP quickly climbed to the top of the Apple Store free app list, triggering an influx of users. Behind this explosive phenomenon, it is not only the user's thirst for cutting-edge technology, but also the expectation of landing the application of large models and improving efficiency.

With sufficient technical confidence, Baidu took the lead in opening the Wenxin Invitation on March 16, and then became one of the first companies to open its services to the public, which won high recognition from the capital market.

After Baidu opened Wenxin's words, its stock price was significantly boosted. As of the close of trading on the 31st, Baidu Group-W (09888) shares continued to rise, now up 2.12% to HK$139.4. The ADR of U.S. stocks rose as high as 5.5% overnight, updating the intraday high since August 10. All these fully prove the confidence of the capital market in Baidu.

Goldman Sachs, Bank of America and other well-known investment banks also expressed great recognition of Baidu, believing that Baidu will become the main traffic entrance for AI applications in the future, and has a leading edge in technology and application. With the rapid development of artificial intelligence, more and more investors are re-evaluating the disruptive improvement of AI to Baidu's future performance.

Judging from the historical performance of Baidu's stock price, it already has good investment value. In the past few years, Baidu's performance has been solid, with revenue continuing to grow and profit margins gradually improving. This is mainly due to Baidu's leading position and continuous innovation in search engines, online advertising, artificial intelligence and other fields.

As the capital market gradually recognizes the innovation ability of Chinese technology companies in the field of AI, Baidu, as a pure representative of "AI stocks", is expected to usher in a take-off moment. Previously, Morgan Stanley upgraded its rating to overweight, and Baidu's share price is expected to rise another 31% driven by artificial intelligence.

In this transformation, known as the "fourth industrial revolution", Baidu, with its leading position in the field of AI, will be the first to benefit and benefit for a long time. The take-off moment of Baidu's stock price has arrived, and the capital market will usher in a feast of AI technology.

1

Technology leadership creates a competitive advantage

With the subversive changes of AI technology, the global technology community has fallen into a frenzy, and big guys such as Musk and Huang Jenxun have participated in it in various ways. Nvidia, Microsoft and other companies have been driven by AI, and their stock prices have gone all the way up. This is enough to prove the level of frenzy of the market.

As AI helps shift China's $7.4 trillion consumer market from offline to online, Morgan Stanley believes that Baidu is a clear beneficiary of China's increased AI adoption, thanks to Baidu's leading edge in technology and applications.

Baidu has a leading edge in technology and application, and Google, DeepMind and other companies launched large models at a similar time, as early as 2019 launched the basic model of Wenxin Yiyan Wenxin large model ERNIE1.0, and in the following four years continue to update and iterate.

On March 16 this year, Baidu took the lead in launching Wenxin Yiyan, which is the first generative AI product in China and the first among the world's major manufacturers, so that Chinese world has its own ChatGPT since then. The move demonstrates Baidu's confidence in its technological leadership.

In the third-party evaluation results, Wen Xin also represents China's large language model products, which is in a leading position in the world. InfoQ research data shows that Baidu Wenxin Yiyan has a comprehensive score of 74.89% in the comprehensive test results of large language models, second only to ChatGPT (77.13%), far surpassing Claude (68.29%) in third place; In IDC's evaluation report, Baidu Wenxin Model 3.5 scored 7 full scores in 12 indicators, ranking first in the domestic mainstream large model in three areas: comprehensive score, algorithm model and industry coverage.

Baidu Wenxin big model is ahead of the domestic mainstream large model in terms of the depth of basic technology and the breadth of industrial application, and it is also leading in the world. In many fields such as finance, manufacturing, energy, and transportation, Baidu is also working with ecological partners to self-develop or jointly develop applications based on large models, and has already made preliminary explorations in some fields for commercial applications.

With the opening of Wenxin Yiyan to the whole society on August 31, enterprise users can also invoke Wenxin's Yiyan ability through Baidu Intelligent Cloud Qianfan large model platform. This will also accelerate the evolution of Wen Xin's words.

Li Yanhong revealed that version 4.0 of the Wenxin model will be launched at the end of the year. Wen Xin's ability to speak will also be further evolved after iterative updates and more real-world artificial feedback.

2

Long-term in AI

In the field of AI, Baidu's lead is not accidental. Baidu bet on the future, forward-looking layout, through nearly 10 years of R&D investment of more than 140 billion real money, it has created a solid moat for itself. Continuous technological innovation and R&D investment will allow Baidu to maintain its leading position in the future competition.

With the advent of the era of large models, Baidu is ushering in a harvest period by transforming its AI R&D investment in the past decade into a commercialization path.

As a leader in Chinese models, Baidu has deep R&D strength and rich product portfolio, which provides strong support for its commercial application in the field of AI. At the same time, investors also expressed their understanding and support for Baidu's long-term large-scale investment in technology research and development, demonstrating the capital market's recognition of Baidu's investment in AI.

In Li's eyes, Baidu's advantage lies in the adequacy of technical preparation. Through the comprehensive layout of chip layer, frame layer, model layer and application layer, Baidu has strong self-research strength in these four layers, which is also the core moat for Baidu to be ahead of other enterprises.

In Baidu's just-released Q2 financial report, Baidu's overall performance was eye-catching, and its net profit increased by 44%. While the basic market performance is strong, the commercialization of large models has broad prospects and has attracted much attention from the capital market. Through technical advantages and commercial applications, Baidu continues to improve the commercialization value of large models, and has great potential for future development.

Baidu CFO Luo Rong also said that Baidu already has the strength to seize the opportunities brought by generative AI and large-language models in the field of AI. In the future, Baidu will continue to firmly invest in AI and increase investment in large language models and generative AI.

With the launch of Wenxin, Baidu has found a promising commercialization path while maintaining its technological leadership. This achievement not only demonstrates Baidu's strength in the field of AI, but also brings huge investment opportunities for investors.

3

Baidu's stock price ushered in an era of take-off

Wenxin's full opening to society is a landmark event in the era of big models, and this important node not only demonstrates Baidu's leading position in the field of AI, but also injects new impetus into its future development.

The real feedback of massive users will promote the continuous improvement of Wen Xin's ability to speak and enter a positive cycle. In the competition of the large model industry, the completeness of computing power and corpus is crucial. With its first-mover advantage, Baidu has accumulated a rich corpus and continues to lead in AI product iteration. The possibility of latecomers gaining the upper hand has been ruled out, and a pattern of the stronger getting stronger has been formed.

As Robin Li, Baidu's founder, chairman and CEO, said, Wen Xin's large-scale opening of its services to hundreds of millions of Internet users will receive a lot of real-world human feedback, which will further improve the basic model and iterate at a faster pace to create a better user experience. The leading large-model technology not only gives Baidu the opportunity to show how it reconstructs itself through AI and big models, but also plays a positive role in industry empowerment.

On the application side, Baidu is building AI native applications with the Wenxin big model and Wenxin. Baidu Search, Baijia Number, Baidu Wenku, Baidu Input Method and other products are under development and have successively launched related AI functions. This will reshape Baidu's product line and give it a new growth driver. For example, the "AI Document Assistant" of Baidu Library Internal Testing uses AI technologies such as large models to reconstruct the traditional learning office mode and improve office efficiency. At the same time, advertising business is Baidu's main source of revenue, and AI technology can further reduce costs and improve efficiency, drive more partners to further bind with Baidu, and promote the development of Baidu's advertising business.

The leading edge of the cloud allows Baidu to empower partners. Robin Li believes that generative AI and large-language models have tremendous transformative capabilities in many industries, which provides a significant market opportunity for Baidu. Today, Baidu Intelligent Cloud also issued an announcement, enterprise users can log in to the official website of Baidu Intelligent Cloud, click to enter the Qianfan model platform, and call the ability of Wen Xin to speak. Baidu Intelligent Cloud also said that it will announce four major supporting measures at the 2023 Baidu Cloud Intelligence Conference held on September 5 to help enterprises use and make good use of large models.

Baidu will not only usher in a golden age in the field of AI, but will also have a profound impact on the real world. With Wenxin's words being the first to open to the public, Baidu's business capabilities will also usher in a new explosive period.

This will be a systematic change, the spring breeze of big models has come, Baidu will also expand profitability, and the valuation space will be further released.

* The above content does not constitute investment advice, does not represent the views of the platform, the market is risky, investment needs to be cautious, please make independent judgment and decision-making.