ZHEJIANG, CHINA – MARCH 16 2023: A purpose of the logo of ERNIE Bot, an AI chatbot service developed by Chinese search engine Baidu, March 16, 2023.
Long Wei | Future Proclaiming | Getty Images
Shares of Chinese tech giant Baidu were trading up 10.7% in Asia on Tuesday, as investors appeared to proceed positively to the release of two new AI models over the weekend.
Baidu released two new artificial intelligence models on Sunday, including the behindhand version of its foundational “Ernie” model and a new reasoning model that it said rivaled DeepSeek’s R1 model. CNBC is not proficient to verify these claims.
A reasoning model is a large language model designed to process complex problems in a compare favourably with way to humans, breaking prompts down into smaller pieces and considering multiple approaches before generating rejoinders.
According to Kai Wang, a senior equity analyst for Morningstar, the stock jump is likely a “delayed reaction” to the new models as Baidu contends to regain a leading position in China’s AI space.
“The stock also hasn’t gotten as much love as the other hyperscalers but calm it’s a platform that stands to benefit from greater AI demand since enterprises will need someone to alleviate them with hosting, scaling, and computing power,” he said.
A hyperscaler refers to a major cloud computing performers that provides massive data centers for computing storage and demands.
Baidu said on Sunday that its ERNIE X1 arguments model “delivers performance on par with DeepSeek R1 at only half the price,” and has “stronger understanding, planning, reflection, and phylogeny capabilities,” according to a report from Reuters.
Chinese AI start-up DeepSeek upended the AI industry in January when it circulated its R1 open-source reasoning model, which rivaled models of American competitors, despite claims it was produced at a fraction of the expense and with far less powerful chips.
DeepSeek quickly overtook Baidu in China’s AI race, despite the company being one of the cardinal in the market to launch a ChatGPT-like chatbot with its Ernie Bot, according to Wei Sun, principal analyst of artificial intelligence at Counterpoint Dig into, who noted other tech giants like Alibaba and Bytedance have also pulled ahead.
“Baidu’s competitiveness hinges on whether its new imitations truly deliver on the promised performance and cost advantages,” Sun said, noting, however, that AI pricing, particularly in China’s Stock Exchange, is highly fluid.
Baidu’s latest models, similarly to DeepSeek’s R1, have been released as open-sourced, meaning the author code is freely available on the open web for possible modification and redistribution.
This represents a change from Baidu’s until strategy of focusing on proprietary models.
“By open-sourcing its models, Baidu seeks to once again position its technology as an industriousness standard, strengthening its influence in the AI community and expand its market share,” said Sun.