Behind Baidu’s New AI Models Focused on Cost and Capability
Cost and capability have emerged as twin battlegrounds in the global AI supremacy race, as the industry faces pressure to reduce pricing barriers to adoption.
In response, Baidu has positioned a strategy focused on affordable yet capable models, while enterprises worldwide also scrutinise the return on investment from their AI implementations and developers seek alternatives to western platforms.
The company has unveiled its newest large language models (LLMs), ERNIE 4.5 Turbo and ERNIE X1 Turbo, alongside new developer tools at its annual
Baidu Create 2025 conference in Wuhan, emphasising cost reduction as a key differentiator.
ERNIE 4.5 Turbo and X1 Turbo: delivering multimodal capabilities at lower costs
ERNIE 4.5 Turbo and ERNIE X1 Turbo, feature enhanced multimodal capabilities, while being offered at significantly reduced prices compared to previous versions.
Speaking to an audience of more than 5,000 developers and technology professionals, Baidu’s Co-founder and Chief Executive Officer, Robin Li, emphasised the importance of practical applications in the AI ecosystem: “Our releases aim to empower developers to build the best applications — without having to worry about model capability, costs or development tools.”
The new models come two months after Baidu launched ERNIE 4.5 and ERNIE X1 in March 2025, continuing the company's strategy of rapid iteration in the competitive LLM market.
ERNIE 4.5 Turbo
ERNIE 4.5 Turbo, aimed at general-purpose applications, is priced at 20% of its predecessor's cost.
The model charges RMB 0.8 per million tokens for input and RMB 3.2 per million tokens for output, which Baidu claims is 0.2% of the price of GPT-4.5 and 40% of competing model DeepSeek V3.
According to the company, the new model demonstrates improvements in reducing hallucinations along with enhanced logical reasoning and coding abilities.
ERNIE X1 Turbo
Meanwhile, ERNIE X1 Turbo is positioned as a deep thinking reasoning model and features advanced chain-of-thought capabilities, which refers to the ability to work through problems step-by-step rather than providing immediate answers.
The model costs half the price of its predecessor at RMB 1 per million tokens for input and RMB 4 per million tokens for output.
Both models are immediately available for users to access through ERNIE Bot at no charge, and Robin noted they were designed to address industry challenges including single-modality limitations, high rates of hallucination, slow response times and high pricing.
“Multimodality will become a standard feature of future foundation models,” Robin predicted during his keynote address.
“The market for pure text-based models will shrink, while the market for multimodal models will continue to grow.”
Baidu’s new applications with digital humans and multi-agent collaboration tools
Beyond the models themselves, Baidu showcased several applications built on its AI technology at the conference, including highly realistic digital humans capable of livestreaming.
Huiboxing platform
The company's Huiboxing platform now allows users to create personalised digital avatars from videos as short as two minutes in length.
“AI digital humans are one of the most exciting breakthrough applications in 2025,” Robin said.
Xinxiang: A ‘general super agent’
Baidu also officially released Xinxiang, described as a ‘general super agent’ application that employs multiple AI agents working collaboratively to solve complex user problems.
Currently, Xinxiang covers 200 task types across knowledge analysis, travel planning, education and office work scenarios, with plans to expand to more than 100,000 task types.
Robin highlighted the democratisation of programming capabilities through AI: “There are nearly 30 million programmers and 8 billion people globally.
“As technologies become more accessible, everyone can possess the capabilities of a programmer.”
Cangzhou OS: A content operating system
The company further introduced Cangzhou OS, described as a content operating system jointly developed by Baidu Wenku, Baidu's document sharing platform, and Baidu Drive, its cloud storage service.
The system powers AI Note, which Baidu claims is the industry's first multimodal AI note-taking tool, allowing users to generate notes, mind maps and quizzes from educational videos.
The company additionally reported that Baidu Wenku's AI features now serve 40 million paying users and 97 million monthly active users, while Baidu Drive's AI features have more than 80 million monthly active users.
Baidu’s open initiatives and Model Context Protocol integration
To support the growing AI application market, Baidu further announced several initiatives aimed at developers.
Firstly, the Baidu Search Open Platform launched an AI Open Initiative, which will provide developers with traffic generation opportunities, monetisation options and access to AI services.The company also announced support for the Model Context Protocol (MCP), a standardised interface for connecting external services with large language models.
Robin compared MCP to a “universal socket” for AI during demonstrations of its integration across Baidu services including the Qianfan Foundation Model Platform, Baidu Search, e-commerce applications and Baidu Drive.
To encourage more innovation, Baidu also announced the third ERNIE Cup Innovation Challenge with doubled prize amounts reaching up to RMB 70 million in investment for outstanding projects.
The company additionally committed to training an additional 10 million AI professionals over the next five years.
The annual Baidu Create conference focused on the theme ‘Models Lead, APPs Rule’ this year, featuring six sub-forums covering topics including MCP, agent-based AI systems and DeepSeek technology.
“Without practical applications, neither advanced chips nor sophisticated models hold value,” Robin said.
“While there will be a multitude of models, it is the applications that will truly dominate in the future. Applications are where true power lies.”
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