While the global AI market is developing rapidly, Chinese technology giant Baidu unveiled its latest AI models on April 25, 2025, significantly intensifying domestic competition. The new Ernie 4.5 Turbo and X1 Turbo models are not only characterized by improved performance, but are offered at significantly lower prices – up to 80% cheaper than their predecessors.
The move comes at a critical time when Baidu is facing increasing pressure from emerging AI companies such as DeepSeek. DeepSeek had launched open-source models in January 2025 that can compete with GPT-4 but at only 20% of the cost. Baidu’s response is a combined strategy of technological improvements and aggressive pricing, with the X1 Turbo model priced well below DeepSeek’s R1 model ($0.55/$2.19) at $0.28 per million input tokens and $1.10 per million output tokens.
The new models offer improved multimodal capabilities for processing text, images, video and audio. Of particular note is the increased “emotional intelligence”, which enables the models to better interpret memes and satire. The X1 Turbo model can also independently access APIs, databases and external software to solve complex problems on its own.
At the same time, Baidu has put a cluster of 30,000 Kunlun P800 third-generation AI accelerators into operation. These specialized chips were developed to reduce reliance on foreign hardware such as NVIDIA’s H100 – a strategic move in light of US export controls restricting China’s access to advanced semiconductors.
Challenges in market penetration
Despite technological parity with global leaders, Baidu struggles with consumer adoption: Ernie Bot’s monthly active users are 23 million, compared to ByteDance’s Doubao’s 87 million. The share of API calls in the Chinese generative AI market is also only 18%, while DeepSeek claims 34%.
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The most important facts about the update:
Price reduction: Ernie 4.5 Turbo is 80% cheaper than its predecessor
Performance improvement: Ernie X1 Turbo solves 92% of the problems in the GSM8K math benchmark
Hardware innovation: 30,000 self-developed Kunlun P800 chips form the infrastructure
Strategic realignment: Baidu announces open source plans for Ernie models by June 2025
Enterprise applications: Focus on AI solutions for banking and manufacturing with 100,000 business customers
