Baidu is going after its fellow Chinese rival, DeepSeek, launching a reasoning model it claims is as good as DeepSeek R1 but far cheaper.
The new Baidu reasoning model, Ernie X1, was also accompanied by the unveiling of Ernie 4.5, the latest version of the company’s foundational model.
The news comes just days after Alibaba made its bid for a top AI spot with a new AI assistant built on its Qwen LLM; and the launch of Manus AI, the world’s first fully autonomous AI agent.
Can Baidu Contend With DeepSeek?
It seems that the AI launches are coming thick and fast from China in a trend that will be alarming AI ventures in the US. Baidu’s latest launches take aim squarely at DeepSeek’s much lauded – and much villainized – R1 chatbot.
Reuters shared a Baidu statement in which the company claimed: “Ernie X1 delivers performance on par with DeepSeek R1 at only half the price.”
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It adds that X1 has “stronger understanding, planning, reflection, and evolution capabilities.” It also makes the claim that the reasoning model is its first to use tools autonomously.
However, for Western users, the key advantage is that the Baidu models are currently not in the crosshairs of any governments. DeepSeek, in contrast, has already been banned in several countries, including Italy, over data usage concerns.
Playing Catchup
Despite the controversy, DeepSeek still hit number one in both the Apple App Store and the Google Play Store in January.
Baidu is facing strong competition from Alibaba as well, whose stocks surged upon the launch of its QwQ-32B, which is free to download and use, even commercially. However, it was DeepSeek and OpenAI that Alibaba waved its gauntlet at and not Baidu, giving a strong sense of where the ecommerce giant sees its greatest competition.
Baidu, however, is pushing hard. It made grand claims for its Ernie bot in April last year, saying that it had exceeded 200 million users. The company also relaunched its AI development competition, offering a prize of 50 million yuan ($7 million). There are rumors that an Ernie 5 model is imminent.
There Can Be Only One (Percent)
Baidu’s CEO seems to be pretty confident that his company will manage to sustain, despite the huge competition in the AI battle for supremacy; and that’s not just from rival Chinese ventures.
In October, Robin Li predicted the demise of 99% of AI companies. He said:
“Probably one percent of the companies will stand out and become huge and will create a lot of value or will create tremendous value for the people, for the society. And I think we are just going through this kind of process.”
He explained that the main issue with chatbots – accuracy – will be solved in the next 18 to 20 months. However, the sheer volume of companies is not sustainable. It seems, though, that he is self-assured that Ernie will be one of the survivors.
