2025-03-16T20:13:34Z Read in app Baidu's new suite of AI models is named "Ernie." Regis Martin/Getty Images This story is available exclusively to Business Insider subscribers. Become an Insider and start reading now.Have an account? Chinese tech giant Baidu released open-source AI models Ernie X1 and Ernie 4.5.The company says the models rival those from OpenAI and DeepSeek in performance per cost.The models also further the AI industry's turn toward open-source.Baidu, China's answer to Google, has released two new AI models.OnIt also launched a multimodal foundation model called Ernie 4.5 that the company says "outperforms GPT-4.5 in multiple benchmarks while priced at just 1% of GPT-4.5."Baidu said it's also making its chatbot, Ernie Bot, free to the public on April 1, ahead of schedule.The tech giant said it will "progressively integrate" Ernie 4.5 and X1 into its product ecosystem, including Baidu Search, China's dominant search engine.Baidu's new releases come as Silicon Valley reckons with the cost of AI models, largely spurred by the latest drops from DeepSeek, a Chinese startup launched by hedge fund High Flyer.In December, DeepSeek released a large language model called V3, and in January, it unveiled a reasoning model called R1. The models are considered as good or better than equivalent models from OpenAI but priced "anywhere from 20-40x cheaper," according to analysis from Bernstein Research.OpenAI vs DeepSeek vs BaiduTokens are the smallest unit of data an AI model processes. Companies price models according to how many input tokens a model processes and output tokens it generates.For Ernie 4.5, Baidu said that input and output token prices start as low as 0.004 Chinese yuan per thousand input tokens and 0.016 per thousand output tokens.BI converted those figures into US dollars to understand how chat models from OpenAI, DeepSeek, and Baidu compare against one another. While Baidu's cost claims against OpenAI's latest, "emotionally intelligent" GPT-4.5 check out, DeepSeek's V3 barely wins out in cost against Ernie 4.5. In comparison to GPT-4.5, R1 and Ernie 4.5 demonstrate a 98-99% drop in cost. BI via Flourish In terms of reasoning models, conversions to USD show that Ernie X1 is the cheapest of all with prices just under 2% of OpenAI's o1. X1 is about 50% of the cost of R1 and a little under 2% of the cost of o1. BI via Flourish Cost-savings aside, those who've already tried Ernie seem impressed. "Been playing around with it for hours, impressive performance," Alvin Foo, a venture partner at Zero2Launch, said in a post on X.Baidu's latest models demonstrate not only the growing competition between the United States and China in the AI race but also the latter's growing embrace of open-source models."One thing we learned from DeepSeek is that open-sourcing the best models can greatly help adoption," Robin Li, Baidu's CEO, said on an earnings call in February. "When the model is open source, people naturally want to try it out of curiosity, which helps drive broader adoption."China, which aims to become a global leader in AI by 2030, has captured headlines over the past weeks with the release of AI agent Manus and Alibaba's own open-source model, QwQ-32B.Until now, AI insiders seemed eager for the coming launch of DeepSeek's R2. But the Ernie collection may give it a run for its money.