Baidu Adopts Open-Source AI with ERNIE X1 to Challenge Market Leaders

The Chinese tech giant's new strategy and AI models aim to reclaim its competitive edge, with investor confidence reflected in a 10.7% stock surge.

Baidu has released two new AI models, including the ERNIE X1 reasoning model, which it claims matches DeepSeek's R1 in performance at half the cost.
The company has shifted from proprietary AI to open-source strategies, marking a significant change in its approach to compete with rivals like DeepSeek, Alibaba, and ByteDance.
Baidu's stock rose 10.7% following the announcement, signaling positive investor sentiment toward its new direction.
Experts note Baidu's large user base and extensive data resources as key advantages, though its ability to deliver on performance and cost claims remains under scrutiny.
DeepSeek's disruptive R1 model, launched in January, set a high benchmark for cost-efficient AI, pressuring Baidu to innovate and adapt to industry trends.