March 17, 2025 Chinese tech giant Baidu has introduced two advanced artificial intelligence (AI) models—Ernie X1 and Ernie 4.5—positioning them as cost-effective alternatives to leading AI systems from companies like DeepSeek and OpenAI. They claim these models are half the cost of Deep Seek, which itself is only a fraction of OpenAI. In addition, Baidu has confirmed that at least one of these models – Ernie 4.5 will be open source.
Ernie X1: A Reasoning-Focused AI Model
Ernie X1 is designed to excel in tasks requiring advanced reasoning, including AI image generation, code interpretation, webpage analysis, and complex calculations. Baidu asserts that Ernie X1 matches the performance of DeepSeek’s R1 model but at half the cost, highlighting its capabilities in understanding, planning, reflection, and evolution.
Ernie 4.5: Enhancing Multimodal Understanding
Alongside Ernie X1, Baidu released Ernie 4.5, an upgraded version of its foundational AI model. Ernie 4.5 offers enhanced multimodal understanding, improved language abilities, and a high emotional quotient, enabling it to comprehend memes and satire. Baidu claims that Ernie 4.5 outperforms OpenAI’s GPT-4.5 in multiple benchmarks while being priced at just 1% of GPT-4.5’s cost.
**Strategic Integration and Open-Source Initiative**
Baidu plans to integrate these models across its product ecosystem, including Baidu Search, to enhance user experience. The company also announced that it will make the Ernie AI models open-source by June 30, 2025, aiming to foster wider adoption and innovation within the global developer community.
Implications for the Global AI Landscape
The introduction of Ernie X1 and Ernie 4.5 signifies China’s escalating efforts to lead in the global AI arena by 2030. By offering high-performance models at competitive prices and embracing open-source principles, Baidu is intensifying competition with U.S. tech giants, challenging their cost structures and market positions.
Conclusion
Baidu’s launch of Ernie X1 and Ernie 4.5 represents a strategic move to assert dominance in the AI industry. By continuing to deliver models at a fraction of the cost of US frontier models and making these open source, China is striking at the heart of US dominance in AI.
