China's Baidu Unveils Ultra-Affordable AI Models

Chinese tech leader Baidu has introduced two competitive multimodal AI models—ERNIE 4.5, an enhanced version of their foundational model, and ERNIE X1, a model designed for deep reasoning tasks.

Key Highlights:

• ERNIE 4.5 brings improved "EQ" and language capabilities, better hallucination prevention, and enhanced logical reasoning and coding functions. Baidu claims ERNIE 4.5 outperforms GPT-4.5 on several benchmarks, while priced at just 1% of GPT-4.5’s cost—around $0.55 to $2.20 per million input and output tokens.

• ERNIE X1, Baidu's first reasoning-focused model, rivals DeepSeek’s top model, R1, but at half the price. Like R1, ERNIE X1 uses a step-by-step “thinking” approach, excelling at complex tasks such as document analysis and calculations.

Why is this significant:

Baidu is advancing the creation of highly affordable AI technology, with ERNIE 4.5 priced at just 1% of GPT-4.5 and ERNIE X1 offering similar performance to DeepSeek’s R1 at half the cost. This could signal the start of a global AI price competition, potentially forcing Western companies to lower their prices, making cutting-edge AI more accessible on a global scale.

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