Chinese tech giant Baidu has unveiled its open-source AI models, Ernie X1 and Ernie 4. 5. The company claims these models offer performance comparable to those from OpenAI and DeepSeek, but at a lower cost. These releases further indicate a significant shift in the AI sector towards open-source solutions. Baidu, often referred to as China's equivalent of Google, launched two new AI models on Saturday. Ernie X1 is a reasoning model that Baidu asserts achieves performance on par with DeepSeek R1, but at just half the price. Additionally, the company introduced Ernie 4. 5, a multimodal foundation model that allegedly "outperforms GPT-4. 5 in various benchmarks while costing only 1% of GPT-4. 5. " Furthermore, Baidu announced that it will make its chatbot, Ernie Bot, available to the public for free on April 1, ahead of its original schedule. Baidu also stated that it intends to "progressively integrate" Ernie 4. 5 and X1 into its ecosystem, which includes Baidu Search, the leading search engine in China. These new releases occur amidst discussions in Silicon Valley regarding the expenses associated with AI models, driven largely by recent offerings from DeepSeek, a Chinese startup established by the hedge fund High Flyer. In December, DeepSeek launched a large language model, V3, and in January, it introduced the reasoning model, R1. Analysts from Bernstein Research consider these models to be on par or superior to similar offerings from OpenAI, yet priced "anywhere from 20-40 times lower. " When comparing OpenAI, DeepSeek, and Baidu, it's important to note that tokens represent the smallest unit of data processed by an AI model. Model pricing is based on the number of input tokens processed and output tokens generated. Baidu indicated that the cost for input and output tokens for Ernie 4. 5 begins at RMB 0. 004 per thousand for input tokens and RMB 0. 016 per thousand output tokens. BI converted these amounts into US dollars to provide a comparative analysis of chat models from OpenAI, DeepSeek, and Baidu.

While Baidu's claims against GPT-4. 5 appear valid, DeepSeek's V3 ultimately proves to be more cost-effective than Ernie 4. 5. Regarding reasoning models, currency conversions show that Baidu's Ernie X1 stands out as the most affordable option, priced at just under 2% of OpenAI's o1. Cost savings aside, initial users of Ernie have shared positive impressions. Alvin Foo, a venture partner at Zero2Launch, remarked on X that he has been experimenting with it for hours and finds its performance impressive. Baidu's latest models highlight not only the intensifying competition between the US and China in the AI landscape but also China's increasing advocacy for open-source models. "One thing we learned from DeepSeek is that releasing top models as open-source can significantly boost adoption, " stated Robin Li, Baidu's CEO, during an earnings call in February. "When a model is available as open-source, people's natural curiosity drives them to explore it, leading to wider adoption. " With ambitions to become a global AI leader by 2030, China has garnered attention in recent weeks with the launch of AI agent Manus and Alibaba's open-source model, QwQ-32B. Until now, industry insiders have been eagerly anticipating the upcoming launch of DeepSeek's R2, but Baidu's Ernie collection may prove to be a strong contender.