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.

Baidu introduced Ernie X1, a reasoning model that can support tools such as advanced search, generation of AI images, and webpage reading.

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 introduces its low-cost AI models, including Ernie 4.5, to rival DeepSeek and strengthen its position in China’s growing AI market.

Tech giant says reasoning model Ernie X1 ‘delivers performance on par with DeepSeek R1 at only half the price’.

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.