Overview

• 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.