Baidu stock soars on new AI model to rival DeepSeek, ChatGPT

Baidu stock was up some 9% on Monday.

Shares of Baidu (NASDAQ:BIDU) were soaring on Monday on the release of a new AI model that rivals the breakthrough DeepSeek AI model.

Baidu, which is basically the Google of China, has the dominant search engine in China and has long been a leader in AI technology.

Its new AI models for search and other functions were released on Monday. One of the updates is ERNIE 4.5, a native multimodal foundation model. It is the latest, more advanced version of the ERNIE 4.0 AI model. The other is ERNIE X1, a deep-thinking reasoning model. Both ERNIE models are free to use and will be accessible through Baidu’s search websites and apps.

Baidu stock was surging on Monday, up about 9.2% as of 2:15 p.m. ET, trading at over $102 per share.

Baidu touts the new ERNIE X1 model as having deep-thinking reasoning on par with the DeepSeek model but says it can be developed at half the price. One of the most impressive features of DeepSeek was that it was as good, or better than ChatGPT, and can be developed cheaper and faster. So, it appears ERNIE is even more cost-effective to develop.

“The launch of ERNIE 4.5 and ERNIE X1 marks a significant milestone in pushing the boundaries of multimodal and reasoning models, offering advanced capabilities at a more accessible price point. It also underscores Baidu’s commitment to continued investment in developing smarter and more powerful next-generation foundation models,” officials said in a news release.

Cheaper and better than ChatGPT?

ERNIE 4.5 and X1 will be aggressively integrated into its product ecosystem, including Baidu Search along with other offerings.

ERNIE 4.5, the native multimodal foundation model, exhibits improvements in understanding, generation, reasoning and memory, along with enhancements in hallucination prevention, which means it limits false outputs, as well as logical reasoning, and coding abilities. Also, it can integrate and understand text, images, audio, and video content. It also possesses strong intelligence and contextual awareness, and understands internet memes, satirical cartoons, and more.

The company says ERNIE 4.5 outperforms GPT-4.5 in multiple benchmarks while priced at just 1% of GPT-4.5.

ERNIE X1 possesses enhanced capabilities in understanding, planning, reflection, and evolution. It is Baidu’s first multimodal deep-thinking reasoning model capable of tool use. The company said it excels in Chinese knowledge Q&A, literary creation, manuscript writing, dialogue, logical reasoning, and complex calculations. It supports various tools including advanced search, Q&A on given document, image understanding, AI image generation, code interpreting, webpage reading, TreeMind mapping, Baidu academic search, business information search, and franchise information search.

The Baidu news comes just days after Google introduced Gemma 3, an AI model it hails as the most advanced yet. Alphabet stock was flat on Monday.