Baidu, a key player in China’s AI scene, is making waves with its latest efforts to regain its footing in the competitive AI market. The company has just introduced two cutting-edge AI models that reflect a significant shift in strategy. These include Baidu’s first-ever model focused on reasoning, along with a new direction towards open-source licensing.
While experts are giving a nod to these advancements, Baidu still faces the challenge of catching up in the fast-paced AI world. Wei Sun, an AI principal analyst at Counterpoint Research, points out, ‘Baidu is in catch-up mode, largely because it underestimated how quickly the market was changing.’
This launch is a big step for Baidu, especially considering its Ernie chatbot, an early rival to ChatGPT, hasn’t gained the traction it hoped for. Lian Jye Su, Omdia’s chief analyst, mentions that Baidu’s new models are a game-changer, tackling earlier delays in deploying reasoning models.
Back in January, a Chinese startup called DeepSeek shook things up with its R1 reasoning model, offering performance comparable to U.S. models but at a fraction of the cost. Baidu now claims its new ERNIE X1 model matches DeepSeek R1’s performance while being even more affordable, enhancing understanding, planning, and adaptability. However, CNBC hasn’t independently verified these claims.
Sun highlights that Baidu’s future success will depend on how well these new models perform and their cost-effectiveness. Even though Baidu led China’s generative AI scene in 2023, it’s since been outpaced by competitors like Alibaba and ByteDance.
Ray Wang from Constellation Research explains that Baidu’s lag is partly due to focusing on proprietary models and getting sidetracked by regulations. Unlike DeepSeek’s open-source strategy, Baidu’s closed-source models meant starting from scratch, which limited collaboration opportunities.
Baidu’s recent model releases suggest a shift toward openness—a strategy it once resisted but now sees as crucial for staying competitive. Following the lead of Alibaba, DeepSeek, and Tencent, Baidu is now embracing open-source development.
Kai Wang from Morningstar underscores the fierce competition in AI, with new models popping up every month. Still, Baidu’s rich data resources and popular applications, like its search engine and Baidu Tieba, give it a unique edge.
Omdia’s Su believes Baidu can maintain its leadership by leveraging its vast consumer base and continuing to innovate. Baidu CEO Robin Li is optimistic, envisioning generative AI transforming Baidu search into something groundbreaking.
