Baidu (NASDAQ: BIDU) stock surged 9% in the regular trading session on Monday after the Chinese tech giant launched a new AI model to compete with DeepSeek, a competitor making waves in the artificial intelligence field.
On Sunday, Baidu introduced ERNIE 4.5, its native multimodal foundation model, and ERNIE X1, a “deep-thinking reasoning model” with multimodal capabilities. The company claims ERNIE X1 matches the performance of DeepSeek’s R1 model “at only half the price.”
In a statement, Baidu revealed that both models are offered for free to individual chatbot users. The company highlighted the advanced features of ERNIE X1, including “enhanced abilities in understanding, planning, reflection, and evolution.” It also excels in areas like dialogue, logical reasoning, and complex calculations.
Earlier this year, DeepSeek, a Chinese startup, made headlines with its open-source AI model. Built with less advanced chips, it matched the performance of OpenAI’s ChatGPT while keeping costs significantly lower. The release sent ripples through the tech and financial markets.
Meanwhile, Baidu is also making moves beyond AI models. Reuters reported, citing insiders, that Tesla (NASDAQ: TSLA) is partnering with the Chinese tech giant to improve its advanced driving assistance system (ADAS) in China. The collaboration aims to enhance Tesla’s Full Self-Driving (FSD) V13 with more precise mapping data for Chinese roads.
Baidu (NASDAQ: BIDU) shares have fallen almost 10% of their value in the 12 months leading up to Friday.
