• Baidu has launched two new AI models, Ernie X1 and Ernie 4.5, to bolster its position against DeepSeek and OpenAI.
• The company claims Ernie X1 provides similar capabilities to DeepSeek's R1 but at half the price.
• Baidu's new models are free to the public, signaling a shift towards open-source AI in China.
• Ernie 4.5 is said to outperform OpenAI's GPT-4.5 across various benchmarks, enhancing Baidu’s market competitiveness.

HONG KONG, March 16 (Reuters) - In a significant move within the competitive landscape of artificial intelligence (AI), Baidu has launched two new models: Ernie X1, its first reasoning-focused AI, and Ernie 4.5, a multimodal foundation model. These models are designed to compete with emerging products from the startup DeepSeek, which has gained attention for its cost-effective AI solutions. Baidu boasts that ERNIE X1 can deliver performance comparable to DeepSeek's R1 at only half the operational cost. The company's recent announcement included making both models available free to the public, significantly ahead of schedule, as part of its strategy to attract users and enhance adoption of its technology.

Baidu's latest AI models are seen as part of the broader battle in the AI industry, prompting reactions from international tech markets, including a rise in Baidu's stock prices in reaction to positive reception and investor optimism. According to Business Insider, Baidu's shares climbed 1.23%, reflecting a year-to-date increase of 11.62%.

The Ernie 4.5 model and its multimodal capabilities have reportedly surpassed OpenAI’s GPT-4.5 in several assessments, which is a bold claim for a company competing with established giants in the field. Baidu has noted that its models can handle various types of data, including text, images, and videos, positioning them strongly against both current competitors and those on the horizon.

Furthermore, Baidu plans to transition Ernie 4.5 and X1 to an open-source model by June 30, aligning with the trend seen in the AI sector, where open-source solutions often encourage broader usage and innovation. Baidu's CEO, Robin Li, emphasized this strategy during an earnings call, highlighting the advantages that come from open sourcing leading AI models. The emergence of such technologies is crucial for Baidu as it seeks to retain its relevance amid increased competition from firms like DeepSeek, Alibaba, and Tencent, which are rapidly advancing their own AI capabilities.

Despite these advancements, Baidu faces ongoing challenges, including stagnant ad revenues that have affected its financial metrics. In a wider context, the increasing capabilities of Chinese firms in AI are seen as a threat to their U.S. counterparts, as they offer competitive pricing that questions the long-term sustainability of high-cost AI deployments in America.

As the competitive dynamics in the artificial intelligence landscape continue to evolve, Baidu's attempts to enhance its technological offering and pricing structure may significantly influence the global AI marketplace.

For more details, visit Reuters, Channel News Asia, and South China Morning Post.