(Reuters) – Chinese search engine group Baidu said on Tuesday that the success of AI company DeepSeek had inspired it to embrace an open source model, under which the source code of its upcoming generative AI chatbot release will be publicly available.
In a call following its fourth-quarter 2024 results statement, Baidu CEO Robin Li said the decision to open source its Ernie 4.5 series partly stemmed from DeepSeek’s success, which he said had accelerated the adoption of foundational AI models.
In early 2023 Baidu became among the first companies in China to launch a ChatGPT-style chatbot, claiming its then current Ernie 4.0 version matched OpenAI’s GPT-4.
However, Ernie has struggled to gain widespread adoption, due to intense competition, particularly from DeepSeek’s latest models such as R1, released last month.
In response, Baidu last week announced plans to open-source its next-generation models from June and offer premium chatbot services for free from April.
“One thing we learned from DeepSeek is that open-sourcing can greatly help adoption,” Li said during the earnings call.
“Ernie 4.5 will be our best models ever, and we want our users and customers to try (it) out more easily than before. Our decision to open source the Ernie 4.5 series is backed by our deep confidence in our technology leadership.”
For the three months through December, Baidu reported a 2% drop in quarterly revenue to 34.12 billion yuan ($4.7 billion), dragged down by a slowdown in the advertising business, though offset by gains from cloud AI.
The result slightly beat analyst estimates of 33.32 billion yuan, according to data compiled by LSEG.
Baidu’s Cloud AI unit grew 26% to 7.1 billion yuan in the quarter, largely driven by AI, while in December its Ernie platform handled 1.65 billion daily user queries and interactions, up from 600 million in August.
However, Baidu’s online marketing business, excluding streaming service iQIYI, was down 7% to 17.9 billion yuan, reflecting the slowing Chinese economy amid a prolonged property market slump that has led to small businesses trimming their advertising spending.
Baidu’s U.S.-listed shares were down about 7% in early morning trading.
($1 = 7.2770 Chinese yuan renminbi)
(Reporting by Akash Sriram in Bengaluru and Yelin Mo in Beijing; Editing by Kim Coghill and David Holmes)
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