On Monday, Chinese technology giant Baidu is making its Ernie generative AI large language model open source, a move by China’s tech sector that could be its biggest in the AI race since the emergence of DeepSeek. The open sourcing of Ernie will be a gradual roll-out, according to the company. 

Will it be a shock to the market on the order of DeepSeek? That’s a question which divides AI experts. One big change is that Baidu wasn’t always on the open source bandwagon. “Baidu has always been very supportive of its proprietary business model and was vocal against open-source, but disruptors like DeepSeek have proven that open-source models can be as competitive and reliable as proprietary ones,” Lian Jye Su, chief analyst with technology research and advisory group Omdia, previously told CNBC. Now that Baidu has made the decision to open source, even if it isn’t a DeepSeek moment, it is an important one for the global AI race. “This isn’t just a China story. Every time a major lab open-sources a powerful model, it raises the bar for the entire industry,” said Sean Ren, associate professor of computer science at the University of Southern California and Samsung’s AI Researcher of the Year. Ren says Baidu’s move puts pressure on closed providers like OpenAI and Anthropic to justify gated APIs and premium pricing. “While most consumers don’t care whether a model’s code is open-sourced, they do care about lower costs, better performance, and support for their language or region. Those benefits often come from open models, which give developers and researchers more freedom to iterate, customize, and deploy faster,” Ren said. Other industry experts view an open source Ernie as potentially being even more disruptive to both U.S. and Chinese competitors when it comes to the price equation. “Baidu just threw a Molotov into the AI world,” said Alec Strasmore, founder of AI advisory Epic Loot. “OpenAI, Anthropic, DeepSeek, all these guys who thought they were selling top-notch champagne are about to realize that Baidu will be giving away something just as powerful,” Strasmore said, comparing Baidu’s move to Costco creating Kirkland. He said the message to all of the world’s startups is “stop paying top dollar.” “This isn’t a competition; it’s a declaration of war on pricing,” Strasmore said.Baidu said in March that its recent ERNIE X1 model delivers performance on par with DeepSeek’s R1 “at only half the price.”

Baidu’s CEO, Robin Li, hinted earlier this year that the roll-out would help developers worldwide in AI development. “Our releases aim to empower developers to build the best applications without having to worry about model capability, costs, or development tools,” Li said in a speech to developers in China in April. In the least, it’s one more moment in time when investors have to analyze how cost dynamics in AI model access are changing quickly, and what it means that more applications can be built on top of “these dirt cheap models,” Strasmore said. “Baidu is going to be seeding the world with Chinese AI models,” he added.