During the launch event in Beijing, Baidu cofounder and CEO Robin Li showed off some of Ernie Bot’s capabilities, which included naming a company and giving it a slogan; writing a 600-word business newsletter; explaining economic theory; and writing a poem based on a Chinese idiom.

However, his presentation did not include a live demonstration of Ernie Bot, relying instead on prerecorded material and slides.

Disappointed by the highly anticipated technology’s unveiling, investors sent Baidu’s Hong Kong–listed shares falling by as much as 10%, ending Thursday’s trading session 6.4% lower and wiping around $3 billion off the company’s market capitalization.

Yu Yingbo, CIO at Shenzhen Qianhai United Fortune Fund Management Co., told Bloomberg that Li’s presentation “looked prerecorded; so far it’s all just PowerPoints.”

“The demos did not look spontaneous,” he said.

A spokesperson for the company was not available to answer Fortune’s questions about the market response to Ernie Bot’s launch.

Decade of research—but ‘not perfect yet’

Speaking at the unveiling event, Baidu CEO Li said many people had asked him if the tech giant was really ready to launch its ChatGPT competitor—but he noted the firm had been investing in the A.I. research leading to Ernie Bot for a decade.

“Today’s Ernie Bot is close to ChatGPT or even ChatGPT-4, and actually Baidu is the first one to launch such a product—others including Google and Facebook have no same-level product,” he insisted.

OpenAI recently unveiled ChatGPT-4, the fourth iteration of its software, which is being used by Morgan Stanley, Stripe, and Duolingo in real-world capacities.  

Still, Li seemed to acknowledge at the event that Ernie had a ways to go—and the presentation was mandated by the market’s enthusiasm for A.I. bots.

“It is not perfect yet, so why do we need to launch it today?” he said. “Because the market demands it.”

Major tech firms, including Microsoft and Google, have entered into an “A.I. arms race” since OpenAI’s chatbot, ChatGPT, became a worldwide phenomenon following its release toward the end of last year, with investors closely watching the competition.

The public response to ChatGPT prompted a $10 billion investment in OpenAI’s technology from Microsoft, while Google premiered its own offering, Bard, last month—with the chatbot wiping $100 billion off parent company Alphabet’s market value after making a mistake in its very first ad. Alibaba and a string of smaller names are also ramping up their A.I. efforts.

Back in February, Baidu stock shot up almost 15% on the back of news that it would soon be launching a ChatGPT rival.

Future optimism

Despite the rocky start, analysts seem to have long-term optimism for the Baidu bot.

In a research note published before Ernie Bot was unveiled on Thursday, Kai Wang, senior equity analyst at Morningstar, said he was optimistic the chatbot could be a long-term catalyst for Baidu, but noted uncertainties lingered around whether the product could dethrone ChatGPT, thanks to a lack of product demonstration.

“Baidu plans to incorporate Ernie into almost every aspect in its company, including autonomous driving and its smart speaker, Xiaodu, in addition to basic queries for its search engine,” Wang said. “We are cautious on whether Ernie can match the success of ChatGPT so far, given that we have not seen real-time use cases despite the multifaceted ambitions in its incorporation.”

Meanwhile, Charlie Chai, an analyst at 86Research, told Reuters that although Baidu’s event on Thursday was a disappointment for many, he believed Baidu remained the best bet when it came to Chinese A.I. development.

“We continue to advise investors to patiently hold shares as the best ‘national champion’ play in China’s (semi-segregated) A.I. space,” he told the news agency.