Baidu Strikes Back: Ultra-Cheap AI Models ERNIE 4.5 and X1 Are Disrupting the Market
Chinese tech giant Baidu has made a bold move in the global AI race, launching two new models — ERNIE 4.5 and ERNIE X1 — at incredibly low prices. With aggressive pricing and impressive performance, Baidu isn’t just competing with Western leaders like OpenAI — it may be triggering a true pricing war that could reshape the AI market. So what does this all mean?
ERNIE 4.5 is an upgraded version of Baidu’s flagship model, which the company claims outperforms GPT-4.5 in several benchmarks, including CCBench and OCRBench — at just 1% of the cost. Imagine: one million input tokens cost just $0.55, and output tokens cost $2.20, compared to $75 and $150 for GPT-4.5! The model boasts improved emotional intelligence, can understand memes and satire, and shows progress in reducing hallucinations, as well as improvements in logical reasoning and coding. Its multimodal capabilities allow it to process text, images, audio, and video — making it a powerful and versatile tool.
Meanwhile, ERNIE X1 is Baidu’s first model focused on deep reasoning and complex thinking. Comparable to DeepSeek R1 in performance, it’s priced at half the cost — around 2% of OpenAI o1 and 50% of R1. X1 uses a step-by-step thinking approach, ideal for complex calculations, document analysis, and tasks requiring planning and reflection. Early users on X are impressed: “Been testing it for hours — performance is amazing,” wrote venture partner Alvin Foo from Zero2Launch.
China continues to amaze the world by delivering AI that’s “too cheap to meter.” With these prices, Baidu could seize significant market share and force Western companies like OpenAI and Google to rethink their pricing. It could mark the beginning of a global pricing war, making cutting-edge AI accessible to millions of users and businesses. Baidu also announced that ERNIE 4.5 will become open-source on June 30, 2025, accelerating its adoption even further.
As Baidu integrates these models into its ecosystem, including Baidu Search, we may be witnessing the birth of a new era in AI — more affordable, yet far more competitive.
