Baidu Shares Jump 10% After Launching Free AI Models to Boost Market Position

BAIDU launched a free AI model on Sunday for an aggressive push in the AI space and to strengthen its position in the global market. According to CNBC, the shares of the Chinese tech giant rose to 10.7% on Tuesday, 18th March 2025. Baidu launched a new AI model on Sunday and an upgraded ERNIE AI model.

The market positively responded to this development, in which Baidu’s stock growth became a trending topic among investors and analysts. This boom reflects Baidu’s growing confidence in the ability to innovate and capitalize the AI industry.

Kai Wang, a senior equity analyst for Morningstar said the stock jump is a “delayed reaction” to the newly launched AI models. He said, “The stock also hasn’t gotten as much love as the other hyperscalers but still it’s a platform that stands to benefit from greater AI demand since enterprises will need someone to help them with hosting, scaling, and computing power.”

Baidu ERNIE 4.5 Leads the AI Innovation Wave

Central to Baidu’s recent AI developments is the launch of the ERNIE 4.5 model, the most sophisticated iteration of its generative AI system. ERNIE 4.5 features better reasoning ability, more accurate responses, and the capacity to perform intricate tasks with human-level precision.

By adding ERNIE 4.5 to its product line and offering these models free of cost, Baidu hopes to entice developers, companies, and researchers across the globe. The slow release of new free-to-use AI models by other international rivals further increases the importance of this move by Baidu, providing the company with a strategic advantage in the rapidly emerging competitive AI market.

Baidu said on Sunday, “ERNIE X1 earning model delivers performance on par with DeepSeek R1 at only half the price and has stronger understanding, planning, reflection, and evolution capabilities.”

Investor Confidence Grows as Baidu Shares Rise

Baidu’s strategic decision to offer advanced AI models for free is already yielding returns in terms of market performance. Baidu’s stock surge as investors see this as a major opportunity for the company to consolidate its AI leadership and fuel future revenue growth. The 10% increase in stock value reflects the market’s positive perception of Baidu’s AI-based strategy.

The move also comes amid a rush among global tech giants to introduce their own generative AI models. The company’s initiative not only enhances its market reputation but also puts it in the lead in the AI race, especially in Asia. In recent times, Baidu has partnered with Tesla to improve FSD performance in China.

A Bold Step for Baidu in the AI Race

By launching free AI models, Baidu has once again showcased its innovative capabilities. The introduction of ERNIE 4.5 and the promise of latest AI advancements are a milestone achievement, showing Baidu’s preparedness to compete on the international stage. The Chinese AI stocks have surged recently, as players like Alibaba launch their own AI models

According to Wei Sun, principal AI analyst at Counterpoint Research, “Baidu’s competitiveness hinges on whether its new models truly deliver on the promised performance and cost advantages.”