DeepSeek impact? Baidu and OpenAI offer free chatbots through Ernie Bot and GPT-5

Baidu, China’s largest internet search company, announced that it will offer its AI chatbot Ernie Bot for free starting April 1, as competition in the AI sector heats up.

The AI service will be accessible at no cost to all users on both desktop and mobile platforms, Baidu said in a WeChat post.

The move comes as rival AI models, including those from emerging Chinese startup DeepSeek, gain traction in the market.

The company made the announcement on WeChat on Thursday, just hours after OpenAI CEO Sam Altman revealed that ChatGPT users would have unlimited access to GPT-5 for free, though paid subscribers would get access to more advanced features.

On Friday, Baidu added that it would launch the next generation of its AI model by the end of June and, for the first time, make it open source, mirroring DeepSeek’s approach.

It will also introduce a free “Deep Search” function in April, offering enhanced reasoning and expert-level responses.

Baidu stock surges 12% on Ernie Bot announcement

Baidu’s decision to make Ernie Bot freely available appears to be a strategic move to counter competition from both domestic and global players.

DeepSeek’s recent R1 AI model has drawn significant attention for delivering performance comparable to US industry leaders at a much lower cost.

Baidu’s stock surged as much as 12% in Hong Kong trading following the announcement, last trading at 95 Hong Kong dollars ($12.20) per share on Friday.

The company’s strong performance has contributed to a 20% rise in the Hang Seng China Enterprises Index since January.

Chinese startups challenge tech giants

Since ChatGPT’s debut in late 2022, Chinese tech giants have been racing to develop homegrown AI alternatives.

Baidu was among the first to launch its own model, ahead of competitors like Tencent and Alibaba.

However, its Ernie Bot has struggled to keep pace with newer models such as ByteDance’s Doubao, which has outperformed it in user engagement.

Emerging AI startups such as DeepSeek and Moonshot AI are also making waves.

Moonshot AI’s chatbot, Kimi, launched late last year and was the third-most visited AI chatbot in China in January, behind DeepSeek and Doubao, according to AI product tracker aircpb.com.

Zhipu AI, another rising player backed by Tencent and Alibaba, has gained attention for its strong government ties but was recently placed on the US Commerce Department’s Entity List over alleged military connections, a claim it denies.

AI firms shift to free services

Most leading AI companies, including OpenAI and Anthropic, have introduced free basic versions of their chatbots, with premium features available through subscription plans.

ChatGPT initially launched as a free service before adding a paid tier for advanced capabilities.

Baidu previously charged users for Ernie Bot’s premium functions, including AI-generated images, with monthly fees reaching 59.9 yuan ($8.20).

Despite competition, the chatbot has built a significant user base, amassing 430 million users as of November 2024.

By making Ernie Bot free and open source, Baidu is looking to regain its position as a dominant player in China’s rapidly evolving AI landscape.