Hong Kong – The rapidly evolving artificial intelligence landscape has sparked a fresh wave of competition among leading tech firms, with Chinese search engine giant Baidu and American AI powerhouse OpenAI making bold moves to attract users. In response to the growing influence of DeepSeek, a rising AI startup, both companies have announced that their chatbot services will now be available to users at no cost.
Baidu, headquartered in Beijing, revealed on Thursday via WeChat that its flagship AI chatbot, Ernie Bot, would become free for both mobile and desktop users starting April 1. Ernie Bot, which boasts premium features such as AI-generated artwork, has been a key player in China’s AI market. By removing the paywall, Baidu aims to enhance accessibility and increase user engagement amid intensifying competition.
Just hours before Baidu’s announcement, OpenAI CEO Sam Altman took to X (formerly Twitter) to unveil the company’s roadmap for its next-generation AI model, GPT-5. In a move that surprised many in the tech industry, Altman confirmed that ChatGPT users would be granted unlimited access to GPT-5 free of charge. However, paying subscribers would still have access to an advanced tier of intelligence, setting a distinction between the general and premium experience.
The strategic timing of these announcements underscores the mounting pressure AI developers face as the industry experiences a surge in innovation and user expectations. Baidu followed up with another statement on Friday, declaring that it plans to release the next iteration of its AI model by the end of June. In a groundbreaking shift, the company also confirmed that this new version would be open source, mirroring DeepSeek’s approach to AI accessibility. Additionally, Baidu announced that Ernie’s Deep Search function, which features improved reasoning capabilities and expert-level responses, would also be launched free of charge in April.
The recent developments highlight how DeepSeek’s advancements have disrupted the AI landscape in China. The startup’s latest R1 AI model has garnered widespread acclaim for delivering performance on par with major American AI firms, but at a fraction of the cost. This achievement has sent shockwaves through the industry, forcing established players like Baidu to adjust their strategies.
Baidu’s response to the escalating competition has been met with enthusiasm from investors. On Thursday, the company’s stock, listed in Hong Kong, surged by as much as 12%. By Friday, its shares were trading at approximately 95 Hong Kong dollars ($12.20), contributing to the broader gains of the Hang Seng China Enterprises Index, which has risen by 20% since January.
The global AI race has been intensifying since late 2022, when OpenAI’s ChatGPT made its public debut and quickly captivated the world. The launch prompted a flurry of activity among Chinese tech giants, all scrambling to develop a domestic alternative. Baidu was among the first to respond, introducing Ernie Bot just four months later, outpacing other major players such as Tencent and Alibaba.
However, despite its early lead, Baidu has struggled to maintain its dominance in China’s AI sector. ByteDance’s Doubao has outperformed Ernie Bot in terms of both user engagement and popularity. Moreover, Alibaba recently revealed that Apple had chosen to collaborate with it for AI integration in China, following a thorough evaluation of multiple local AI firms—including Baidu.
In recent months, the spotlight has shifted away from China’s traditional tech giants, as emerging startups such as DeepSeek and Moonshot AI have taken center stage. Moonshot AI made headlines with the launch of its AI chatbot, Kimi, in late 2023. By January, Kimi had become China’s third-most visited AI chatbot, trailing only DeepSeek and Doubao, according to data from AI tracking firm aircpb.com.
Meanwhile, Zhipu AI, another promising AI company originating from Beijing’s prestigious Tsinghua University, has gained traction with backing from corporate giants like Tencent and Alibaba. However, Zhipu’s progress has not been without controversy. The U.S. Commerce Department recently placed Zhipu on its “Entity List,” accusing the firm of having ties to the Chinese military, a claim the company has denied.
Across the AI industry, many leading developers have opted to provide basic chatbot functionalities free of charge, including OpenAI’s ChatGPT and American AI startup Anthropic’s Claude. This strategy, which allows firms to attract a large user base before introducing premium features, has proven effective in fostering widespread adoption.
Baidu, following a similar trajectory, introduced paid subscription plans for its AI services in 2023. Users were charged up to 59.9 yuan ($8.20) per month for premium functions, including its AI-powered text-to-image generator. By November 2024, Ernie Bot had amassed an impressive 430 million users, solidifying its position as a key player in China’s AI sector.
As the battle for AI dominance continues to unfold, the recent decisions by Baidu and OpenAI mark a significant shift in industry dynamics. By making their services more accessible, these tech giants are not only responding to the pressure posed by emerging competitors but are also shaping the future of AI innovation on a global scale.
