Baidu Stock Drops as Its New AI Model Fails to Win Over Investors
The Beijing-based company is currently trying to catch up with Alibaba Group’s DeepSeek after losing its early-mover advantage.
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[Image source: Chetan Jha/MITSMR Middle East]
A day after unveiling the latest version of its AI model, Baidu’s shares experienced their largest decline in seven months, reflecting a lackluster investor response.
On Thursday, the Beijing-based company unveiled the natively omni-modal foundation model, ERNIE 5.0, at its annual Baidu World technology conference. The upgrades include modeling text, images, audio, and videos for comprehensive multimodal understanding and generation, a capability that competitor models have already achieved earlier in the AI race.
Baidu’s stock fell almost 9.8% on Friday. Other upgrades, announcements, and launches – including those of two AI chips – failed to improve market sentiment.
Baidu is currently trying to catch up with Alibaba Group’s DeepSeek after losing its early-mover advantage. Addressing the same, Baidu founder Robin Li said that the company was an “early riser but late to the fair.”
”AI agents themselves are the most significant applications, and the speed of technological iteration is the only competitive moat,” he said. “We will continue to invest in advancing the frontier models, pushing the boundaries of intelligence to new heights.”
Notably, Baidu announced that its autonomous ride-hailing service, Apollo Go, has completed over 17 million rides worldwide, making it the largest of its kind globally.
As Baidu works to catch up in the AI model race, OpenAI has upgraded the GPT-5 series with two releases: GPT-5.1 Instant and GPT-5.1 Thinking. Meanwhile, Alibaba is preparing to have its main mobile AI app undergo a makeover to resemble OpenAI’s ChatGPT.
