DeepSeek’s Success Just The Start, More AI Funding 'Still Very Much Required,' Says Baidu CEO: 'You Just Don't Know When And Where Innovations Come From' Baidu CEO Robin Li Stresses On Persistent AI Investment Despite DeepSeek's Cost Efficiency. Admits Op - Alibaba Gr Hldgs (NYSE:BABA), Baidu (NASDAQ:BIDU)

Baidu BIDU CEO Robin Li underscored the significance of ongoing investment in data centers and cloud infrastructure. This emphasis comes despite the cost-effectiveness of AI models like DeepSeek.

What Happened: At the World Government Summit in Dubai, Li highlighted the need for more investment to develop smarter models, reported Reuters. This statement comes amid the recognition of DeepSeek for creating language models that achieve performance comparable to top systems like OpenAI’s GPT while requiring significantly less computing power.

“The investment in cloud infrastructure is still very much required. In order to come up with models that are smarter than everyone else, you have to use more compute.”

Baidu was among the first Chinese companies to launch AI products after OpenAI released ChatGPT in late 2022. However, its large language model, Ernie—which Baidu claims is on par with GPT-4—has struggled to witness widespread public adoption.

Li, recognized for his outspoken views on China’s AI industry, noted that U.S. chip sanctions have driven Chinese companies to innovate despite computing limitations. He also appeared to take a more flexible stance admitting that open-source methods could speed up AI adoption.

“You just don’t know when and where innovations come from,” he said.

Why It Matters: Baidu is emerging as a significant rival in the AI sector, posing a challenge to giants like Google GOOGL GOOG. The limited public adoption of its AI model, Earnie indicates a potential area of growth and investment.

In an internal memo to the staff on the company’s 25th anniversary in January, Li stated, "While there's been no ‘super app' so far, the penetration ratio of AI is not low and we'll keep seeing exponential growth in 2025,” reported the South China Morning Post. As the company pushes for AI adoption in the industrial space, Li acknowledged the associated risks in the memo.

Earlier, in January, CNBC’s Jim Cramer speculated about Baidu being the next Chinese tech giant to gain market attention. This speculation followed Alibaba’s BABA AI model outperforming DeepSeek in several benchmarks, leading to a surge in Alibaba’s shares.

Baidu stock price has surged over 10% in the past six months to close at $93.85 yesterday.