Baidu

China's AI Pioneer

Baidu is China's original AI company. Founded in 2000 by Robin Li as a search engine, it has spent a decade building the country's deepest AI research bench — only to watch upstarts like DeepSeek steal the spotlight. Now it's fighting back with open-source models, aggressive pricing, and a user base that has quietly grown to 200 million. The question is whether being first still translates into winning.

The ERNIE Journey

Baidu's large language model family, ERNIE (Enhanced Representation through kNowledge IntEgration), predates the ChatGPT era. The project began in 2019 as a knowledge-enhanced pre-training framework for Chinese language understanding. By the time OpenAI's chatbot sent the world into a frenzy in late 2022, Baidu had already been iterating on conversational AI for three years.

The company launched ERNIE Bot to the public in August 2023, making it the first major Chinese chatbot broadly available. But early demonstrations were underwhelming — a live demo in March 2023 was widely mocked for appearing scripted. The stumble was a PR disaster that underscored a persistent problem for Baidu: despite deep technical investments, the company struggled to translate research leadership into cultural excitement.

The model family matured rapidly through 2024 and 2025. ERNIE 4.5, released in March 2025, introduced native multimodal capabilities — processing text, images, audio, and video in a single model — at aggressive pricing: $0.55 per million input tokens and $2.20 per million output tokens. ERNIE X1, launched the same day, targeted the reasoning model wave catalyzed by OpenAI's o1 and DeepSeek's R1 at even lower prices: $0.28 per million input tokens and $1.10 per million output tokens. Baidu claimed X1 matched DeepSeek R1's performance at half the inference cost. The updated ERNIE X1.1, unveiled at Wave Summit 2025, pushed further with reduced hallucinations and stronger agentic capabilities.

Then came the big moves. In June 2025, Baidu open-sourced the ERNIE 4.5 model family — a significant shift for a company that had kept its models proprietary. ERNIE X1 followed into open source. Ernie Bot has been free since April 2025, removing the last barrier to mass adoption. At the Baidu World Conference in November 2025, Robin Li unveiled ERNIE 5.0: a 2.4 trillion-parameter natively omni-modal foundation model that jointly processes text, images, and audio. It was Baidu's most ambitious release, designed to compete directly with GPT-5-class systems.

The user numbers tell the story. By April 2026, Ernie Bot hit 200 million users — a milestone that reflects the combined impact of free access, open-source models, and deep integration across Baidu's search and cloud properties. No major new model launches occurred in the April-May 2026 window, suggesting Baidu is in a consolidation phase, focusing on enterprise penetration and ecosystem development rather than headline-grabbing releases.

Business and Infrastructure

Baidu operates across three primary segments: online marketing (search ads), AI Cloud, and intelligent driving. Revenue reached approximately $18.5 billion in fiscal 2025, with AI Cloud growing as a significant contributor. The company's market capitalization has fluctuated between $29 billion and $47 billion over recent years, reflecting the tension between AI hype and the reality of a maturing search business facing economic headwinds.

Baidu's AI Cloud serves as the commercial backbone for its model offerings. Enterprise customers access ERNIE models through API calls, fine-tuning services, and industry-specific solutions. The company has invested heavily in data center infrastructure and custom AI chips (Kunlun series) to reduce dependency on Nvidia hardware — a strategic imperative under U.S. export controls.

The PaddlePaddle Ecosystem

Often overlooked in the Western narrative is Baidu's PaddlePaddle, China's most widely used deep learning framework. Launched in 2016 and open-sourced, it predates PyTorch's dominance in much of the world and serves as the training infrastructure for thousands of Chinese enterprises. PaddlePaddle gives Baidu ecosystem gravity — developers trained on the platform tend to stay within it.

Autonomous Driving: Apollo

Baidu's Apollo project operates the largest autonomous ride-hailing service in the world by geographic footprint. The service, branded Apollo Go, runs driverless taxis in multiple Chinese cities including Wuhan and Beijing. While Waymo captures Western attention, Apollo has completed over 6 million cumulative rides. The autonomous driving unit represents Baidu's most tangible AI application beyond software.

Strategic Position

Baidu's challenge is one of narrative. Despite legitimate technical credentials — first-mover advantage in Chinese LLMs, 200 million Ernie Bot users, the PaddlePaddle ecosystem, operational robotaxis — it has been overshadowed by DeepSeek's cost disruption and Alibaba's open-source Qwen offensive. The decision to open-source ERNIE 4.5 and X1, combined with free Ernie Bot access and rock-bottom API pricing, signals that Baidu intends to compete on volume and accessibility rather than premium positioning. Whether a search-era giant can win the generative AI war remains an open question — but no Chinese company has been fighting it longer, and 200 million users is not nothing.