Baidu's Open-Source Move Pressures U.S. AI Firms
Baidu, a Chinese tech giant, is set to escalate competition in the global AI sector. Despite being less known outside China, Baidu's recent strategic shifts are putting pressure on U.S. AI firms. The company's open-source move, starting with its popular Ernie chatbot, is expected to intensify price competition in the industry.
Baidu's Ernie API already holds a significant 18% market share in the developer market, while its rival DeepSeek maintains a 34% share. In a significant departure from its historical proprietary business model, Baidu accelerated its pivot to open-source technology in 2023. This move undercut competitor pricing, with Baidu launching Ernie 4.5 and its X1 reasoning model at notably lower prices in March. Baidu's founder and CEO, Li Yanhong (Robin Li), himself expressed surprise at the company's open-source decision.
Baidu will gradually release the open-source version of Ernie, starting immediately. This shift aims to achieve broader adoption and cultivate a developer ecosystem around Ernie. Currently, Ernie has approximately 23 million monthly active users, compared to Duobao's 83 million. In February, Baidu made Ernie available for free, discontinuing its monthly subscription model. This strategic move is expected to intensify pressure on U.S. AI firms, despite Baidu's limited brand recognition outside China.
Baidu's open-source strategy is reshaping the AI industry, driving price competition and putting pressure on U.S. AI firms. With its Ernie chatbot now open-source and free to use, Baidu is poised to expand its user base and developer ecosystem, potentially challenging the dominance of U.S. players in the global AI market.
