Baidu's Ernie Goes Open Source: A Game-Changer in the Global AI Race

China's biggest public AI drop since DeepSeek, Baidu's Ernie, is about to hit the market

ZHEJIANG, CHINA - MARCH 16 2023: A view of the logo of ERNIE Bot, an AI chatbot service developed by Chinese search engine Baidu. On Monday, Chinese technology giant Baidu plans to make its Ernie generative AI large language model open source, a move by China's tech sector that could be its biggest in the AI race since the emergence of DeepSeek. A Baidu spokesman confirmed the plan and said the open sourcing will be a gradual roll-out. Will it be a shock to the market on the order of DeepSeek? That's a question which divides AI experts. One big change is that Baidu wasn't always on the open source bandwagon. "Baidu has always been very supportive of its proprietary business model and was vocal against open-source, but disruptors like DeepSeek have proven that open-source models can be as competitive and reliable as proprietary ones," Lian Jye Su, chief analyst with technology research and advisory group Omdia, previously told CNBC. Now that Baidu has made the decision to open source, even if it isn't a DeepSeek moment, it is an important one for the global AI race. "This isn't just a China story. Every time a major lab open-sources a powerful model, it raises the bar for the entire industry," said Sean Ren, associate professor of computer science at the University of Southern California and Samsung's AI Researcher of the Year. Ren says Baidu's move puts pressure on closed providers like OpenAI and Anthropic to justify gated APIs and premium pricing. "While most consumers don't care whether a model's code is open-sourced, they do care about lower costs, better performance, and support for their language or region. Those benefits often come from open models, which give developers and researchers more freedom to iterate, customize, and deploy faster," Ren said. Other industry experts view an open source Ernie as potentially being even more disruptive to both U.S. and Chinese competitors when it comes to the price equation. "Baidu just threw a Molotov into the AI world," said Alec Strasmore, founder of AI advisory Epic Loot. "OpenAI, Anthropic, DeepSeek, all these guys who thought they were selling top-notch champagne are about to realize that Baidu will be giving away something just as powerful," Strasmore said, comparing Baidu's move to Costco creating Kirkland. He said the message to all of the world's startups is "stop paying top dollar." "This isn't a competition; it's a declaration of war on pricing," Strasmore said. Baidu said in March that its recent ERNIE X1 model delivers performance on par with DeepSeek's R1 "at only half the price." Baidu's CEO, Robin Li, hinted earlier this year that the roll-out would help developers worldwide in AI development. "Our releases aim to empower developers to build the best applications -- without having to worry about model capability, costs, or development tools," Li said in a speech to developers in China in April. In the least, it's one more moment in time when investors have to analyze how cost dynamics in AI model access are changing quickly, and what it means that more applications can be built on top of "these dirt cheap models," Strasmore said. "Baidu is going to be seeding the world with Chinese AI models," he added.

China's Baidu declares war on OpenAI and others by open-sourcing Ernie chatbot - SiliconANGLE

China's Baidu declares war on OpenAI and others by open-sourcing Ernie chatbot Chinese search engine giant Baidu Inc. today announced that it's open-sourcing its powerful generative artificial intelligence chatbot Ernie, in a move that experts say will nudge the industry away from a battle over performance and into a price war. The company, which is often said to be "China's Google" due to its dominance of the domestic search market, confirmed it will gradually roll out the open source version of Ernie starting today. Analysts say Baidu is making a direct challenge to western competitors such as OpenAI and Anthropic PBC, commoditizing high-performance AI to undermine their expensive licensing fees. It marks a dramatic change of policy for Baidu, which has previously always been a staunch supporter of proprietary, closed systems. By making the code of its flagship large language model available to everyone, it's hoping to achieve more widespread adoption and grow a thriving developer ecosystem around the technology, which could ultimately become more profitable than charging for access to its application programming interfaces. Baidu has rapidly escalated its shift to open source tech this year, making a series of aggressive moves that aim to undercut its rivals' pricing. In February, it announced it's making Ernie available for free, dropping a monthly subscription model in order to grab more users. Then in March, Baidu launched Ernie 4.5 and its X1 reasoning model, with prices much lower than any of its rivals. It followed later that month by releasing "Turbo" versions of both models and slashing its already low prices by 80%. Omdia analyst Lian Jye Su told CNBC that Baidu's move is a major surprise, because the company has traditionally followed a proprietary business model. "But disruptors like DeepSeek have proven that open-source models can be as competitive and reliable as proprietary ones," he said. Badiu may also be trying to take advantage of the substantial headwinds faced by DeepSeek Ltd, which has reportedly been forced to delay the release of its next-generation R2 model. Last week, The Information reported that the company is struggling to obtain enough of Nvidia Corp.'s high-end graphics processing units to finish training R2, as a result of fresh U.S. sanctions on chip exports to China. At present, Ernie has around 23 million monthly active users, which puts it a long way behind the 83 million monthly active users of Duobao, a rival chatbot created by TikTok's parent company ByteDance Ltd. Meanwhile, in terms of the developer market, Baidu's Ernie API has an 18% market share, trailing DeepSeek's 34% share. Just like in the U.S., the Chinese AI market has erupted into fierce competition, with other players including the e-commerce giant Alibaba Holdings Ltd. and the gaming developer Tencent Holdings Ltd., plus a number of startups, known as the "AI tigers". They include Zhipu AI Ltd., which has built a rival to ChatGPT and been identified as a key challenger by OpenAI, and MiniMax, which primarily focuses on generative AI video models. Both startups are thought to be preparing for initial public offerings on the Hong Kong stock exchange, seeking foreign capital. Another challenger is Baichuan Intelligent Technology Co. Ltd., which has previously released models that surpassed OpenAI's and Anthropic's on various benchmarks. Baidu's move will likely increase the pressure on U.S. AI firms, even if it still struggles with low brand recognition outside its home nation. OpenAI Chief Executive Sam Altman acknowledged the threat posed to his company in January, stating on Reddit that the company needs to figure out a new open source strategy as it's unlikely to maintain a performance lead going forward. He has since announced plans to release an "open-weights" model in the near future. Alec Strasmore of the AI advisory firm Epic Loot Inc. told CNBC said Baidu has essentially declared war on the rest of the industry, sending a message to the world's startups that they no longer need to pay top dollar to access powerful AI. "This isn't a competition, it's a declaration of war on pricing," he said. By going down the open source route, Baidu may also be able to sidestep U.S. sanctions on China, as it will be able to leverage the expertise of AI contributors from all over the world. The U.S. has previously raised concerns that Chinese firms might attempt such a strategy, and some lawmakers have even labeled open-source AI models as a "security risk". In a report earlier this year, U.S. House Select Committee on the CCP Chairman John Moolenaar accused DeepSeek of being a "weapon" of the Chinese Communist Party, saying it was designed to spy on U.S. citizens and steal its technology.