Baidu drops paywall on it AI model Ernie Bot in bid to compete with DeepSeek

Baidu just made a bold move in China’s red-hot AI race. The search giant on Sunday (March 16) announced the release of its latest AI reasoning model, X1, along with an upgrade to its foundational model, Ernie 4.5.

But the biggest headline? It’s making its AI chatbot, Ernie Bot, free to use– two weeks ahead of schedule.

The decision comes as Baidu fights to stay competitive in China’s rapidly evolving AI scene, where startups like DeepSeek have shaken up the industry with open-source models that are highly efficient and cost-effective. DeepSeek’s surprise debut in January sent ripples through the sector, forcing legacy players to rethink their strategies.

Baidu’s X1 model is designed to go toe-to-toe with DeepSeek’s offering but at a lower cost, the company claimed in a WeChat post. Previously, users had to pay a monthly subscription to access Baidu’s most advanced AI models. Now, anyone can use them for free, a clear sign that Baidu is shifting gears to attract more users in a market dominated by fierce competition from ByteDance, Moonshot AI, and Tencent.

AI Wars Heat Up in China

Baidu was among the first Chinese tech giants to roll out generative AI to the public in 2023, but staying ahead has proven difficult. DeepSeek’s open-source model has been widely adopted by businesses and government agencies, while other tech firms have scrambled to keep up.

Even Baidu itself integrated DeepSeek’s R1 model into its search engine. And it’s not the only one leveraging the upstart’s tech. Tencent rolled out an AI model in February that it claimed could generate responses faster than DeepSeek, while still incorporating DeepSeek’s technology into WeChat.

Alibaba, meanwhile, is doubling down on AI investments. The e-commerce giant announced a staggering 380 billion yuan ($52 billion) commitment to AI over the next three years and recently rolled out a new version of its AI assistant powered by its Qwen reasoning model. It’s also working with Apple to develop AI for iPhones in China.

The Open-Source Play

Baidu isn’t stopping at free access—it’s also planning to follow DeepSeek’s lead by open-sourcing its Ernie AI models starting June 30. That move could be a game-changer, giving developers more flexibility to build on Baidu’s tech and potentially expanding its influence in China’s AI ecosystem.

For now, Baidu’s free AI push signals an aggressive strategy to retain users and fend off a growing list of rivals. But as China’s AI battle intensifies, it remains to be seen whether making AI more accessible will be enough to secure its lead.

With inputs from AFP