Baidu’s AI Shake-Up: Can ERNIE 4.5 Turbo Outmaneuver DeepSeek & Alibaba?

Baidu is intensifying its AI initiatives with the launch of ERNIE 4.5 Turbo and ERNIE X1 Turbo, aiming to solidify its position in China’s competitive AI landscape. These models boast enhanced multimodal capabilities and are priced significantly lower than competitors, with ERNIE 4.5 Turbo costing just 1% of GPT-4.5’s price. In a strategic shift, Baidu plans to open-source ERNIE 4.5 by June 30, 2025, and has made its ERNIE Bot free for individual users. This move aligns with industry trends set by rivals like DeepSeek and Alibaba, who have also embraced open-source models. Despite these advancements, Baidu faces challenges, including a 2% year-over-year revenue decline in Q4 2024, primarily due to a 7% drop in online marketing revenue. However, its AI Cloud segment showed promise with a 26% year-over-year revenue increase, indicating potential growth areas.