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.