iFlytek (科大讯飞, 002230.SZ), one of China’s AI titans, yesterday got a taste of the destructive power that can be unleashed by unbridled AI as an allegedly AI-generated online article pared billions off its market value in a matter of hours.
On May 24, iFlytek stock slumped during the afternoon trading and almost fell below the 10% daily limit-down.
At the close of yesterday’s trading, iFlytek shares were down 4.26% to end at 56.57 yuan (US$8) apiece, with a market cap of 131.4 billion yuan.
iFlytek said the stock slump was triggered by an online article written using a generative AI tool, which it did not name in a company statement.
In a letter sent to Chinese media, the company explained the reasons behind the stock price volatility, saying allegations made in the online article were “all false” and its legal team have documented related information for evidence.
The article alleged that iFlytek recently was accused of collecting massive user privacy and data for the purpose of supporting its AI research.
“This action severely infringed upon user privacy and resulted in strong public displeasure and a boycott,” the article said.
It went on to assert that the company could face huge losses and declining market share, sales revenue and issues like future uncertainty.
“The colossal crisis confronting iFlytek has sent a warning to the entire industry,” the article concluded.
In another article, the author cited foreign media reports in saying that the US is considering whether to add iFlytek and Meiya Pico (美亚柏科), a big data company, to the Entity List, which will cut off access to US technologies.
In effect, iFlytek was added to the Entity List in October 2019, but the decision by the US Department of Commerce did “little” to affect the company’s day-to-day operation, iFlytek said.