(Bloomberg) — Baidu Inc. (BIDU) unveiled upgrades to its flagship AI models and slashed their prices as it looks to take on rivals like Alibaba Group Holding Ltd. (BABA) and DeepSeek in China’s increasingly competitive artificial intelligence market.

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The Chinese search engine leader rolled out Ernie 4.5 Turbo and Ernie X1 Turbo, the latest versions of its flagship foundation and reasoning models that it said are faster and cheaper than previous iterations.

Billionaire founder Robin Li told a developer conference in Wuhan that the price of the 4.5 Turbo is 80% lower than its previous version, while the X1 Turbo - Baidu’s answer to DeepSeek — cut its price by half. Baidu shares rose more than 5% in Hong Kong on Friday.

“All these releases are meant to allow developers to focus on building applications without worrying about model capabilities, model costs, or development tools and platforms,” Li said.

The company also launched a slew of products including an AI agent platform known as Xinxiang, which it said can automate everyday tasks, bringing competition to Chinese service Manus AI.

Baidu also added new servers that it said will allow developers to connect their AI models to the company’s search-engine and e-commerce data. The company has produced 30,000 AI chips that it’s now using, Li said, without elaborating.

The Beijing-based company was the first in China’s trillion-dollar tech sector to launch a chatbot modeled after OpenAI’s ChatGPT, but rival chatbots from ByteDance Ltd. and Moonshot AI soon took over in popularity. Open-sourced models like Alibaba’s Qwen and DeepSeek have gained greater recognition within the global developer community.

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