Baidu Unveils Ernie AI Models, Investments

Baidu, Inc. has launched Ernie X1, a new AI model designed for better reasoning, including daily conversations, complex calculations, and logical deduction. This move follows the rise of DeepSeek AI, whose R1 model gained global attention for its high performance at a lower cost.

Alongside Ernie X1, Baidu has upgraded its flagship AI model to Ernie 4.5, claiming it outperforms OpenAI‘s GPT-4.5 in text generation. The company is also making all service tiers, including X1, free for chatbot users ahead of schedule. From June 30, Ernie AI models will be open-source, signaling a major strategic shift.

Baidu has integrated the R1 model into its search engine while its AI growth contributed to a 26% increase in cloud revenue last quarter. However, weak ad sales tempered overall gains. Additionally, the company recently completed its $2.1 billion acquisition of YY Live, freeing up $1.6 billion for AI and cloud investments.

With these developments, Baidu is reinforcing its position in China’s AI race, responding to competition from ByteDance, Moonshot AI, and Alibaba’s Qwen.