iQiyi Inc.'s stock experienced a significant intraday decline of 5.57% on Tuesday. The sharp drop follows the company's recent announcements regarding its artificial intelligence strategy, which have sparked substantial public and market controversy.

The controversy stems from iQiyi's World Conference held on April 20, where the company announced that over 100 artists had agreed to join its Nadou Pro AI agent platform's artist library. Subsequent clarifications from several high-profile artists, including Zhang Ruoyun and Yu Hewei, stating they "had not signed AI authorization agreements," ignited a firestorm of criticism on social media. The public backlash centered on fears of "capital exploitation of creators" and ethical concerns about AI replacing human emotional expression in performances.

Company executives, including CEO Gong Yu, have since attempted to clarify the situation, emphasizing that inclusion in the library only indicates a willingness to explore negotiations and does not constitute blanket authorization. However, the damage to investor sentiment appears significant, compounded by iQiyi's existing financial pressures as it prepares for a potential Hong Kong IPO while reporting losses. The market's negative reaction reflects concerns over the public relations crisis and the strategic risks associated with the company's aggressive AI push.