DeepSeek has emerged as the new standard for AI model makers to beat after launching R1 just before Christmas. As a reasoning model, R1 stood out for matching the capabilities of the best U.S.-made AI models, despite its maker only spending a small fraction of the cost its rivals had spent in training it.

Baidu Inc. released a new artificial intelligence model that articulates its reasoning, in an apparent bid to regain momentum against up-and-coming rivals like DeepSeek.

DeepSeek, a rising Chinese AI startup, has disrupted the industry by introducing AI models it claims rival, or even surpass, leading US-based alternatives — while maintaining significantly lower costs. This has injected fresh momentum into the global AI race, prompting established players like Baidu to step up their game.

Baidu's reasoning model excels in areas like daily dialogs, complex calculations and logical deduction, it said in a statement

Chinese Internet search giant Baidu Inc (百度) yesterday released a new artificial intelligence (AI) reasoning model and made its AI chatbot services free to consumers as ferocious competition grips the sector.

US shares of the Chinese tech giant Baidu gained after the company revealed its Ernie X1 model, said to be as capable and more cost efficient than DeepSeek.

KEY TAKEAWAYS Chinese tech giant Baidu said it has launched two artificial intelligence models, including the ERNIE X1, which it claims delivers the same performance as DeepSeek R1 “at only half the price.

Chinese internet search giant Baidu released a new artificial intelligence reasoning model Sunday and made its AI chatbot services free to consumers as ferocious competition grips the sector.