Chinese tech giant Baidu plans to unveil its next-generation AI model later this year, as DeepSeek shakes up the industry.

China’s Baidu is set to unveil the next generation of its artificial intelligence model in the latter half of this year, according to a source familiar with the matter. This upcoming update comes as Chinese companies race to develop cutting-edge AI models to challenge OpenAI and other U.S.-based tech giants.

In March 2023, Baidu became the first major Chinese tech firm to launch a ChatGPT-like chatbot, Ernie. However, despite a strong start, Ernie has since been overshadowed by other AI chatbots from large tech companies like Alibaba and ByteDance, as well as various startups.

BEIJING — Baidu plans to release the next version of its AI model in the second half of 2025, as newer players such as DeepSeek shake up the market.

The Ernie 5.0 model, referred to as a “foundation model,” will include significant advancements in multimodal capabilities, though specific functions were not disclosed. Multimodal AI can process and integrate different types of content, such as text, video, images, and audio, and even convert one form to another (for example, turning text into video).

Foundation models are capable of understanding language and performing a wide range of tasks, such as generating text and images, and interacting in natural language.

Baidu's planned release comes as Chinese firms intensify their efforts to develop AI models that can rival those of OpenAI and other U.S. companies. In January, DeepSeek, a startup from Hangzhou, caused a global tech stock sell-off with the release of its open-source AI model. This model impressed users with its reasoning abilities and its claims of offering a much more affordable alternative to OpenAI’s ChatGPT.

“We are living in an exciting time... The inference cost [of foundation models] can be reduced by more than 90% over the course of 12 months,” Baidu CEO Robin Li said at the World Governments Summit in Dubai. According to a press release from his fireside chat with Omar Sultan Al Olama, the UAE’s Minister of State for Artificial Intelligence, Digital Economy, and Remote Work Applications.

“If you can reduce the cost by a certain percentage, it means your productivity increases by a similar percentage. This, I believe, is the essence of innovation,” Li added.

Baidu was the first major Chinese tech company to introduce a ChatGPT-like chatbot, Ernie, in March 2023. However, despite its early success, the model has since been overtaken by other Chinese AI chatbots, both from major tech companies like Alibaba and ByteDance as well as from startups.

While Alibaba shares have risen by 33% this year, Baidu’s stock has only increased by 6%. Tencent has seen a 4% rise so far, while ByteDance is not publicly traded.

Baidu’s Ernie model already integrates generative AI across several of the company’s consumer and business products, including cloud storage and content creation.

In January, Baidu revealed that its Wenku platform for creating presentations and documents had reached 40 million paying users by the end of 2024, marking a 60% increase compared to the end of 2023. New features, such as the ability to generate presentations based on a company's financial filings, began rolling out to users in January.

The current version of the Ernie model is Generation 4, which was released in October 2023. An upgraded "turbo" version, Ernie 4.0, launched in August 2024. Baidu has not yet officially announced plans for the next-generation update.

In comparison, OpenAI's latest version of ChatGPT, GPT-4, was released in May 2024. OpenAI CEO Sam Altman recently stated during a Reddit "ask me anything" session that there is no public timeline for the release of GPT-5.

Baidu did not respond to a request for comment.