Not Just DeepSeek, China's AI Landscape Heats Up As Baidu Launches Free Ernie Bot

Baidu, Inc BIDU stock gained Thursday after the Chinese internet search company shared plans to launch the next generation of its artificial intelligence model in the second half of 2025, CNBC cited unnamed sources familiar with the matter.

The company looks to offer its artificial intelligence chatbot, Ernie Bot, free of cost from April 1 to all users on both desktop and mobile platforms, Reuters cites from Baidu’s WeChat post.

Ernie 5.0 could have enhancements in multimodal capabilities, CNBC cited the source.

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“Multimodal” AI can process texts, videos, images, and audio to combine them and convert text to video and vice versa.

Chinese companies race to develop innovative AI models to compete with OpenAI and other U.S.-based companies.

In January, Chinese AI startup DeepSeek prompted a global tech stock sell-off by releasing its open-source AI model, which said it could cost-undercut OpenAI’s ChatGPT. Nvidia Corp NVDA lost $600 billion in stock value in a single day.

Recently, Apple Inc AAPL tapped Alibaba Group Holdings BABA to bring AI features to iPhones in China after initially reaching out to Baidu.

At the World Governments Summit in Dubai, Baidu CEO Robin Li proclaimed the possibility of slashing the inference cost of foundation models by over 90% in 12 months, which, according to him, implied raising productivity by a similar percentage.

Baidu launched its ChatGPT-equivalent chatbot called Ernie in March 2023.

Also, Alibaba cut Qwen-VL model prices by up to 85%, intensifying China’s AI price war to gain market share. Baidu and ByteDance had responded to Alibaba’s price war with their deals.

CNBC’s Jim Cramer wondered if Baidu might be the next Chinese tech giant to draw market focus after Alibaba and DeepSeek.

Price Action: BIDU stock is up 4.46% at $97.50 premarket at last check Thursday.

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Photo by Koshiro K on Shutterstock