A top Chinese company unveiled its challenger to OpenAI's unprecedented ChatGPT on Monday, even as the country's state-run media warns of a potential "AI bubble."

SenseTime Group CEO Xu Li introduced SenseChat during a Monday presentation, having the interactive AI tell a story about a cat and answer a series of questions about the story before later asking it to write code, Bloomberg reported.

SenseChat is the latest of many generative AIs to be released to the public since ChatGPT broke open the space late last year. Generative AIs are bots that aim to create new things by consulting their existing body of data.

ChatGPT shocked many of its users when it was released last year, showing the capability to hold a reasonable conversation and produce things like poems and movie scripts effectively with just a simple prompt.

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The AI system does have its drawbacks, however, as ChatGPT frequently struggles to provide factually accurate answers. The AI will often resort to simply fabricating details to fill out its content.

Chinese state media has also sounded the alarm about what it calls a potential "AI bubble," arguing that investment that has flown toward AIs like ChatGPT may be benefiting from "excessive hype."

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"While capital is chasing the ChatGPT concept, it needs to pay attention to avoid running into a bubble," the state-run paper Economic Daily wrote.

"Regulators should enhance monitoring and crackdowns of behaviors aimed at hyping up popular concepts and manipulating stock prices, and create an orderly market with standards for information disclosure, to support the long-term development of AI," the article continued, according to the South China Morning Post.

For its part, the U.S. has sought to limit China's ability to develop effective AI, banning the sale of AI accelerator chips to Chinese companies.