Baidu to offer Ernie Bot for free amid DeepSeek challenge

Chinese tech firm Baidu said it would offer access to its flagship artificial intelligence chatbot, Ernie Bot, for free starting April 1.

The chatbot, first released just a few months after OpenAI’s ChatGPT, will be available for free to all users across mobile and desktop platforms, the company announced on Thursday, as reported by Reuters.

Baidu cited reduced costs and improved technology

Baidu said the decision to offer Ernie Bot for free is due to reductions in “inference costs” – basically the costs involved in training large language models (LLMs), including computing power, data storage, and energy use.

The Beijing-based company also announced that a new “Deep Search” function, with “enhanced capabilities in thinking, planning, and tool calling” will also be released for free on April 1.

After the news, shares of Baidu rose as much as 5.7% in Hong Kong trading on Thursday, according to Google Finance. Over the past 52 weeks, the stock has reached a high of HK$119 and low of HK$74.

Per Baidu’s data, Ernie Bot had reached a user base of around 430 million users as of November 2024.

The chatbot was an early leader in China’s AI industry but it is now facing increasing competition from cheaper and more advanced rivals such as DeepSeek, which provides free AI chatbot services. The Chinese startup recently dropped new models and also claimed the superiority of its models in a technical report. DeepSeek said its model outclassed rivals from OpenAI and Stability AI on rankings for image generation using text prompts.

On Wednesday, The Information reported that Baidu was failing to meet Apple’s standards to bring AI to Chinese iPhones. The iPhone maker was reportedly considering working with other firms like Alibaba, it said.

And then on Thursday, Alibaba chairman Joe Tsai confirmed during a conference in Dubai that the e-commerce giant is working with Apple.

Baidu faces stiff competition

Baidu was one of China’s first tech firms to delve deep into the AI sector after OpenAI released its ChatGPT in November 2022. Released in March 2023, Baidu’s Ernie Bot was up until last month seen as the closest rival to ChatGPT. Baidu has reportedly claimed that its latest version Ernie 4.0 matches OpenAI’s GPT-4 capabilities. However, it has not been rosy for Baidu.

According to Asia Financial, one of the tech giant’s biggest challenges has been to achieve widespread adoption in China for the chatbot, although it reportedly handled 1.5 billion daily user queries and interactions.

Data from AI product tracker Aicpb.com shows that in terms of user adoption, Baidu’s offerings have been lagging behind domestic competitors like ByteDance’s Doubao chatbot and the latest competitor DeepSeek.

According to Asia Financial, the search engine giant’s problems also reflect the intense rivalry within the AI sector in China. The world witnessed a price war last year as the firm and its key competitors Alibaba and ByteDance significantly cut prices of LLMs they use to support generative AI products.

Baidu made its Ernie Speed and Ernie Lite free for all business users at that time.

In November last year, Baidu revealed that it was shifting its focus to the commercialization of LLM applications. One of its products I-RAG is a text-to-image technology that uses Baidu’s search capabilities to tackle the AI “hallucination” problems.

The company also announced the launch of Miaoda, a tool that utilizes its LLM capabilities to generate code and allow users to develop software applications without extensive coding expertise.

According to a CNBC report earlier this week, Baidu revealed it is also planning to introduce the next iteration of Ernie Bot in the second half of this year.

Citing sources familiar with the matter, the report further indicates that the latest model, Ernie 5, will feature multimodal capabilities which allow it to process and convert between different formats including text, images, audio, and videos.