Feb 11 - Chinese internet search giant Baidu (BIDU, Financial) plans to launch its next-generation AI model, Ernie 5, in the second half of this year, according to a source familiar with the matter. The forthcoming foundation model will feature multimodal capabilities that process and convert text, video, images, and audio. Baidu's move follows Chinese startup DeepSeek, which recently introduced its AI model R1 and demonstrated budget-friendly methods to build large language models with minimal human input.

U.S. tech stocks experienced turbulence in the past few weeks, with Nvidia (NVDA, Financial) losing nearly $589 billion in market capitalization. Despite these challenges, U.S. leaders continue their push into artificial intelligence. Companies such as Alphabet's Google (GOOG, Financial), Amazon (AMZN, Financial), Meta Platforms (META, Financial), and Microsoft (MSFT, Financial) invest billions to expand their AI infrastructure ahead of 2025.

Baidu CEO Robin Li stresses that continued investments in data centers and cloud infrastructure remain critical. He explains that compute constraints in China drive the need for innovation to reduce costs on both inference and training sides. Baidu did not immediately respond to comment. The Ernie 5 launch could mark a significant step in strengthening Baidu's competitive edge in the global AI market.