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In a move that highlights the growing competition in the AI space, Chinese tech giant Baidu has announced that it will make its advanced AI chatbot, Ernie Bot, available for free starting April 1. The decision comes as Baidu faces increasing pressure from emerging players in the AI field, such as DeepSeek, a startup gaining traction with its innovative AI models.

Baidu’s Free AI Services: What’s New?

Baidu’s Ernie Bot, which includes premium tools such as AI-generated art, will now be free for both mobile and desktop users. The company made the announcement on Thursday through WeChat, signaling its commitment to enhancing access to AI technology. The move marks a significant shift in Baidu’s business model, as the company previously offered premium services for a fee.

This announcement comes on the heels of OpenAI’s CEO Sam Altman revealing the roadmap for the next version of GPT, GPT-5, on X (formerly Twitter). Altman also confirmed that ChatGPT users would get unlimited access to GPT-5 for free, while paid subscribers would enjoy enhanced intelligence features. This development is part of the broader trend of AI companies offering more accessible services to compete for users in an increasingly crowded market.

Baidu’s Commitment to Open Source AI Models

In addition to making Ernie Bot’s features available for free, Baidu confirmed on Friday that it would launch the next version of its AI model by June. For the first time, this new version will be open source, allowing developers and users to modify and improve the model. This shift aligns with the approach taken by DeepSeek, a startup that recently gained attention for offering its AI models at a lower cost compared to leading U.S.-based AI firms. By making Ernie’s next version open source, Baidu hopes to maintain its competitive edge and attract developers eager to contribute to the model’s evolution.

Baidu also announced that its Ernie Deep Search feature, which provides expert-level responses and improved reasoning, will be made free for users starting in April. This move is expected to attract more users to the platform, positioning Baidu’s AI services as a strong contender in the global AI market.

Baidu’s Stock Surge and the Impact of AI Development

Baidu’s announcement has had a positive effect on its stock price. The company’s Hong Kong-listed shares surged by 12% on Thursday and traded at 95 Hong Kong dollars ($12.20) per share on Friday. This surge comes amid a broader rally in China’s tech sector, with the Hang Seng China Enterprises Index climbing 20% since January. Baidu’s stock increase reflects investor optimism about its position in the rapidly growing AI market.

The AI race is heating up in China, and Baidu is working hard to maintain its leadership position. However, the company faces stiff competition from both established giants and emerging startups. DeepSeek, for example, has gained attention for offering AI models at a lower cost than Baidu’s services, putting additional pressure on Baidu to innovate.

The AI Race in China: Baidu’s Position Among Competitors

ChatGPT’s debut in late 2022 sparked a global wave of interest in AI, prompting Chinese tech companies to accelerate their own AI development. Baidu was one of the first to respond, launching Ernie Bot just four months after ChatGPT’s release. The company’s fast response helped it maintain a lead over competitors like Tencent and Alibaba, who took longer to enter the AI chatbot market.

Despite Baidu’s early lead, the company has struggled to match the user engagement and popularity of some of its rivals. ByteDance, for example, has made significant strides with its AI-powered chatbot Doubao, which has garnered a large user base. Even Alibaba, despite its late entry into the AI race, has managed to secure a major partnership with Apple, which chose the company to provide AI functions for its operations in China.

Moreover, China’s long-standing tech giants, including Baidu, are now facing competition from a new wave of AI startups. DeepSeek, which has gained attention for its low-cost AI models, is one of the most prominent players in this new wave. Another rising competitor is Moonshot AI, which launched its own ChatGPT alternative, Kimi, in late 2023. By January 2024, Kimi had become the third-most visited AI chatbot in China, following DeepSeek and Doubao, according to AI tracker aircpb.com.

Baidu also faces competition from Zhipu AI, a Beijing-based company that originated from Tsinghua University and has backing from Tencent and Alibaba. Zhipu AI has strong government ties, but its operations were complicated in January 2024 when the U.S. Commerce Department placed the company on its “Entity List.” The U.S. government cited alleged ties to the Chinese military, a claim Zhipu has denied.

Baidu’s Paid Premium Functions and Growing User Base

Despite the fierce competition, Baidu has seen significant success with its Ernie Bot. The company introduced paid premium functions for its AI services in 2023, charging users up to 59.9 yuan ($8.20) per month for tools like text-to-image generation. As of November 2024, Ernie Bot had amassed 430 million users, highlighting its growing popularity in China and beyond.

However, Baidu is now betting that making its AI services free will attract even more users and help it compete against startups like DeepSeek. By offering a more accessible product, Baidu hopes to maintain its position in the market and fend off challenges from newer players.

The Future of AI in China

The AI race in China is far from over, and Baidu’s decision to offer its services for free is just one step in a larger battle for dominance. As more companies enter the market, Baidu will need to continue innovating and adapting to the changing landscape. The success of startups like DeepSeek and Moonshot AI shows that there is room for disruption in the industry, but Baidu’s deep pockets and established user base give it a strong foundation to build upon.

As the global AI competition intensifies, it will be interesting to see how Baidu and its competitors evolve. With more companies offering free or low-cost services, the future of AI is likely to be shaped by accessibility, innovation, and collaboration.

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