China’s AI Market Heats Up as Baidu Rolls Out Two Free Models to Dominate

Baidu has introduced two new free-to-use AI models, including its first reasoning-focused model, as part of its broader strategy to regain momentum in China’s AI landscape. The launch comes as the company prepares to adopt an open-source approach in response to rising competition.

The ERNIE X1 reasoning model is designed to process complex problems by breaking them down into smaller steps, mimicking human cognitive processes. Baidu has claimed that ERNIE X1 matches DeepSeek R1’s performance at half the cost, though independent verification remains pending.

Industry analysts believe Baidu’s competitiveness depends on innovation speed and real-world performance. With plans to open-source its next-generation Ernie model by June 30, Baidu aims to reinforce its presence in China’s fast-evolving AI ecosystem.

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