Baidu (BIDU) is reportedly preparing an early launch for an upgraded version of its AI model, Ernie, in mid-March as it strives to stay competitive and strengthen its position in the AI space. Earlier this month, the Chinese tech giant announced plans to gradually roll out its upgraded Ernie 4.5 AI model over the next few months and make it open-source starting June 30. The early launch highlights Baidu’s urgency to leverage China’s booming AI sector, especially after Chinese AI startup DeepSeek R1’s debut in late January.
However, Baidu has not yet made any official announcement.
Upgraded Baidu Ernie AI Coming Soon
Market reports suggest that the upgraded 4.5 Ernie model will feature enhanced multimodal capabilities with better reasoning skills and other improvements. Notably, multimodal AI systems can understand and work with different types of information, such as text, images, videos, and audio.
Earlier this month, Baidu announced that its AI chatbot, ErnieBot, will be free to use on desktop and mobile starting April 1. Baidu also revealed a free “Deep Search” feature, enhancing problem-solving, planning, and tool usage. At the same time, CNBC reported that Baidu plans to launch the Ernie 5.0 model in the second half of 2025 to compete with DeepSeek’s R1.
Baidu Struggles to Expand Ernie AI Adoption
Baidu, despite being an early entrant in China’s AI race, is struggling to drive widespread adoption of its Ernie chatbot, despite claiming Microsoft (MSFT)-backed OpenAI’s ChatGPT-4-level performance. On the other hand, newcomer DeepSeek has surged ahead, reaching 33.7 million monthly active users by January 2025. DeepSeek’s rise has intensified competition for Baidu, challenging its AI ambitions. Baidu CEO Robin Li initially argued that keeping AI models closed-source was essential for progress. However, after DeepSeek’s success, he shifted toward open sourcing.
Additionally, Ernie faces fierce competition from ByteDance’s Doubao and Alibaba’s (BABA) Qwen models.
Is Baidu Stock a Good Buy Now?
According to TipRanks, BIDU stock has a Moderate Buy consensus rating based on nine Buys and six Holds assigned in the last three months. At $111.16, the Baidu average share price target implies a 25% upside potential.
Year-to-date, BIDU stock has gained nearly 6%.
