Chinese tech giant Baidu Inc. has unveiled a new AI model called Ernie X1 that can explain its reasoning. In an effort to shore up its position amid growing competition, particularly from DeepSeek, the company has also upgraded its base AI model to Ernie 4.5, claiming it is superior to GPT-4.5. Baidu has also made all tiers of its service, including X1, free for users of its AI chatbot, a few weeks ahead of schedule. The company also announced that its Ernie AI models will be open-sourced starting June 30.
Image source: baidu.com
Ernie X1 is designed to handle everyday conversations, complex calculations, and logical reasoning. This functionality was previously demonstrated by the DeepSeek R1 thinking AI model, which shook up the global AI industry by offering performance comparable to the world’s best AI chatbots, but at the same time consuming significantly fewer development resources. The launch of Ernie X1 can be seen as Baidu’s response to the increasing competition in the generative AI space.
Along with the presentation of Ernie X1, Baidu unveiled an updated AI model, Ernie 4.5. According to the developers, this version outperforms OpenAI’s GPT-4.5 in a number of industry tests, particularly in the field of text generation. However, the specific indicators and methodology of the comparisons are not disclosed. Baidu also provided free access to all service levels, including X1, several weeks ahead of schedule.
One of the company’s most significant moves was the announcement that it would switch to an open-source model from June 30, 2025, which represents a major strategic shift. The move can be seen as a response to the growing popularity of DeepSeek, whose open-source models have gained widespread acceptance among developers around the world. Open-sourcing Ernie AI could allow Baidu to attract more talent to improve its technology and increase its influence in the international AI market.
In addition to releasing new models, Baidu has integrated the competing DeepSeek R1 into its search engine, which remains the core business of its business. This step improves the accuracy of searches and improves the quality of answers generated by the system. Baidu’s revenue from cloud services increased by 26% in Q4 2024, which is explained by the increased demand for computing power required to work with AI. However, this success was partially offset by weak advertising sales dynamics due to the economic situation in China.
In February this year, Baidu completed the acquisition of live streaming platform YY Live from Joyy Inc. for $2.1 billion, of which $1.6 billion was in escrow. The funds can now be used to develop AI and cloud technologies.