By Adam Clark
If you thought the artificial-intelligence competition was hot in the U.S., check out China. Baidu plans to make an upgraded version of its AI chatbot free as it looks to fight back against advances from rivals Alibaba and DeepSeek.
Baidu, which is known for its search engine, stated that it would offer its Ernie AI chatbot at no cost to both desktop and mobile users, from April 1. Baidu is also launching a "deep search" function, designed to handle more complex tasks with reasoning, also free.
"This new offering will provide free access to all advanced features, including extended document processing, enhanced professional search capabilities, advanced AI painting, and multilingual conversation," Baidu said in a statement.
The move looks like a push from Baidu to get back into the spotlight, after it reportedly lost out in a race to be the AI provider for Apple devices in China to domestic rival Alibaba. Alibaba chairman Joe Tsai confirmed the Apple partnership on Thursday.
"Apple has been very selective, they talked to a number of companies in China, and in the end, they chose to do business with us. They want to use our AI to power their phones," Tsai said at the World Governments Summit in Dubai.
Apple recently submitted features for Apple Intelligence, as its AI features are labeled, for sign off from China regulators. Until late last year, it had been expected that Baidu would be the company's partner.
"It has not been reported if Apple has permanently ended the partnership with Baidu, but today's news shows Apple's desire to quickly launch AI features in China...We believe Apple can regain share in the Chinese market if they are able to launch Apple Intelligence successfully to compete with Huawei/ Xiaomi's currently available AI offerings," wrote BofA Securities analysts in a research note on Wednesday.
Both Baidu and Alibaba are competing against DeepSeek, a start-up launched by a Chinese engineer and hedge fund founder which has launched a series of AI models it claims are competitive with leading Western rivals such as ChatGPT. DeepSeek's unveiling of its R1 model last month turbocharged China's technology stocks as investors became more confident that Chinese AI can thrive even without access to the most advanced chips from U.S. companies such as Nvidia.
The market still looks to think that competition is good for business. Baidu's American depositary receipts were up 2.5% in premarket trading after a 4.4% gain on Wednesday. Alibaba's ADRs were rising 0.9% in the premarket after gaining 4.9% the previous day.
Alibaba was a Barron's stock pick for 2025, noting the potential for its low valuation to increase if investors warmed to the Chinese market.
Write to Adam Clark at adam.clark@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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February 13, 2025 07:13 ET (12:13 GMT)
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