Shares of Baidu experienced a notable increase on Monday, with the company’s stock rising 9.8% by the market’s close and reaching a peak of 9.9% earlier in the day. This performance contrasts with the broader market trends, as the S&P 500 declined by 0.2% and the Nasdaq Composite fell by 0.4%.
The Chinese technology company has announced the introduction of two innovative artificial intelligence models named ERNIE 4.5 and ERNIE X1. According to Baidu, the ERNIE X1 model delivers performance equivalent to that of the DeepSeek R1 model but at half the cost. Earlier in the year, DeepSeek’s R1 model gained attention for being trained at a significantly lower price than American models.
The ERNIE X1 is described as a “deep-thinking reasoning model” with capabilities that include image generation, code interpretation, webpage reading, and advanced calculations, among other sophisticated tasks.
Despite Baidu’s advantageous position as the holder of the third highest number of AI-related patents worldwide, the company encounters substantial competition within China and internationally. Although there have been challenges such as declining advertising revenue—a key component of its business—Baidu remains well-positioned to leverage its AI advancements, self-driving technology, and cloud infrastructure for future growth.
