Baidu Goes Aggressive China's In AI Price War With Alibaba, DeepSeek

Chinese tech giants remain aggressively invested in their artificial intelligence ambitions with their price war games to expand market share.

Baidu Inc (NASDAQ:BIDU) showcased its latest AI and reasoning models Ernie 4.5 Turbo and Ernie X1 Turbo Friday.

Baidu slashed the price of 4.5 Turbo by 80% more than its previous version, and the X1 Turbo price by half, intensifying rivalry with Alibaba Group Holding (NYSE:BABA) and DeepSeek, Bloomberg reports citing founder Robin Li at a developer conference in Wuhan.

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X1 Turbo marked Baidu’s answer to DeepSeek. Baidu also launched several products, including an AI agent platform, Xinxiang, which can automate everyday tasks.

Baidu added new servers that it said will allow developers to connect their AI models to the company’s search engine and e-commerce data.

Baidu lagged behind Alibaba and DeepSeek despite being amongst the first in the Chinese tech sector to launch a chatbot modeled after OpenAI’s ChatGPT, which failed to gain traction.

Alibaba and its peers launched successive affordable business intelligence tools for developers that cost just $1 per year for individuals since the Chinese AI upstart DeepSeek triggered a price war with its claims of offering affordable AI models that could beat the likes of OpenAI.

Reportedly, DeepSeek tapped Tsinghua University researchers to develop a technique to improve the reasoning capabilities of large language models (LLMs).

Alibaba Cloud is China’s largest cloud service provider, with over one-third of the market.

Alibaba’s Damo Academy receives FDA breakthrough device status for its AI-powered cancer detection tool, Damo Panda.

Alibaba’s Quark AI app surpassed ByteDance’s Doubao, reaching 150 million monthly users in March.

Price Action: BIDU stock is up 1.79% at $91.10 at last check Friday.

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