DeepSeek R1's new rival

Baidu's new AI models are claimed to surpass DeepSeek R1 and GPT-4.5, but at a lower cost.

Baidu and DeepSeek logos. Photo: Bloomberg .

Baidu has just launched two artificial intelligence models, Ernie X1 and Ernie 4.5. The Ernie X1 reasoning model directly competes with DeepSeek R1 in many aspects, but at a lower cost.

Ernie X1 is a reasoning model that supports various applications such as advanced search, image creation, and web page reading. Based on benchmark tests, Ernie X1's performance is on par with DeepSeek's open-source R1 model, but at half the cost.

"Ernie X1 possesses superior understanding, planning, thinking, and development capabilities," a Baidu representative stated. Some of X1's advertised strengths include everyday conversation, complex calculations, and logical reasoning.

According to the WSJ , DeepSeek R1 caused a stir in the tech world earlier this year. The Chinese startup claimed that its model excelled in problem-solving tasks, performing on par with OpenAI's GPT-40 but at a lower cost per use, and without requiring the most advanced chips for training.

Baidu also upgraded its Ernie platform model to version 4.5. Based on benchmarks, Ernie 4.5 surpasses GPT-4.5 in text generation capabilities, at only 1% of the cost of OpenAI's model.

The company stated that Ernie 4.5 and Ernie X1 will be integrated into user products, including Baidu Search and chatbots. Baidu will release the entire service package (including the X1 model) for free to Ernie AI chatbot users a few weeks earlier than planned.

Baidu plans to open-source its entire Ernie AI model on June 30th, marking a major shift in its operational strategy following the rise of DeepSeek. The R1 model will also be integrated into its search engine, Baidu's core business.

Starting as a search service, Baidu was the first Chinese company to launch a product similar to ChatGPT, called Ernie Bot, in 2023.

In its Q4 2024 earnings report, Baidu's cloud division saw a 26% year-on-year increase in revenue. However, this growth was overshadowed by weak advertising sales in China.

In February, Baidu finalized a $2.1 billion deal to acquire the streaming platform YY Live. The transaction prompted the company to allocate $1.6 billion from its escrow accounts, which are planned for investment in AI and cloud infrastructure.

Ernie Bot's interface upon its launch in 2023. Photo: Reuters .

Along with other AI companies in China, Baidu is facing increasing competitive pressure in the AI ​​field.

According to Bloomberg , chatbots from ByteDance and Moonshot AI quickly gained popularity. Open-source models like Alibaba's Qwen and DeepSeek were widely adopted by the global programming community.

Citi Research analysts describe DeepSeek R1 as a “breakthrough debut” in the AI ​​field. Baidu accelerated its development schedule as it watched competitors continuously upgrade and launch new AI models.

"Baidu can maintain its competitiveness despite increasing pressure from other models, given the shrinking barriers to market entry," analysts believe.