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Chinese tech giant Baidu has introduced two new artificial intelligence (AI) models, positioning them as superior to those of DeepSeek and OpenAI based on certain benchmarks, amid the intensifying competition in large language models (LLMs). On Sunday, Baidu released its multimodal foundational model, Ernie 4.5, and its first multimodal reasoning model, Ernie X1, making them freely available on its website. According to Baidu, Ernie 4.5 outperformed OpenAI’s GPT-4o in several benchmark tests, including CCBench and OCRBench, with its multimodal capabilities covering images, audio, and video. The text performance of Ernie 4.5 also surpassed DeepSeek V3 on multiple benchmarks, while being comparable to OpenAI’s GPT-4.5. Can technology help more sexual assault survivors in South Sudan? Baidu, which launched China’s first LLM in March 2023 following the launch of OpenAI’s ChatGPT, has faced growing competition from other Chinese tech giants in the AI sector. The latest move aims to maintain its foothold in China’s AI market, especially as competitors like DeepSeek, Alibaba, Tencent, and Bytedance have been rapidly gaining business and consumer users. While Baidu did not provide benchmark results for Ernie X1, the company claimed it performs similarly to DeepSeek’s R1 reasoning model but at half the price. The pricing for business access to Ernie X1’s API is set at 2 yuan (US$0.28) per million token inputs and 8 yuan per million token outputs. In comparison, DeepSeek charges US$0.55 per million token inputs and US$2.19 per million token outputs for its reasoning model, R1. The Hangzhou-based startup recently raised its API prices in response to growing demand. Baidu’s founder, chairman, and CEO, Robin Li Yanhong, revealed last month that Ernie 4.5 would become open source by June 30, marking a shift from his previous stance on closed-source AI development. “One thing we learned from DeepSeek is that open sourcing the best models can greatly help adoption,” Li said during an earnings call with analysts in February. “When the model is open source, people naturally want to try it out of curiosity, which helps drive broader adoption.” Despite these advancements in AI, Baidu’s business is still being impacted by weak ad revenue. The company reported a 2% year-on-year decline in total revenue for the fourth quarter, with its full-year revenue down by 1%. Source: South China Morning Post

Asian markets showed mixed performances on Friday, with Chinese technology stocks gaining while most other regional equities declined, reports AP. Japan’s benchmark Nikkei 225 fell 0.72% in afternoon trading to 38,787.02. Australia’s S&P/ASX 200 edged down 0.11% to 8,511.40, while South Korea’s Kospi dropped 0.58% to 2,521.92. Meanwhile, Hong Kong’s Hang Seng gained 0.91% to 21,081.72, and the Shanghai Composite rose 1.01% to 3,303.67. Hong Kong's post office continues to suspend packages for US as it seeks clarification over tariff Chinese tech stocks in Hong Kong appeared set to enter a bull market, driven by renewed investor interest following AI model releases from DeepSeek. Xiaomi’s stock climbed 4.81% to 42.50 Hong Kong dollars, Alibaba gained 1.57% to 100.10 Hong Kong dollars, and Tencent, China’s largest video game company, rose 1.57% to 427 Hong Kong dollars. Japan’s Nikkei could face further pressure due to a stronger yen. According to IG market strategist Yeap Jun Rong, a sharp rise in January’s household spending has reinforced expectations of future rate hikes by the Bank of Japan. “With both headline and core inflation accelerating over the past two months, the case for additional policy responses to curb pricing pressures remains strong,” Yeap noted. On Wall Street, the S&P 500 advanced 0.36% on Thursday, while the Dow Jones Industrial Average slipped 0.28% and the Nasdaq composite increased 0.51%. Investors are also navigating uncertainties related to U.S. President Donald Trump’s tariff policies. While Trump signed executive orders imposing 25% tariffs on Mexico and Canada, concerns over a global trade war have slightly eased after both countries received a 30-day reprieve, suggesting tariffs may be used as a negotiating tool rather than a long-term strategy. However, Trump proceeded with a 10% tariff on Chinese goods, prompting China to retaliate with levies on U.S. coal, liquefied natural gas, crude oil, agricultural machinery, and large-engine cars. Additionally, China launched an antitrust probe into Google and added two more firms to its unreliable entity list. In energy markets, benchmark U.S. crude rose 37 cents to $70.98 per barrel, while Brent crude, the global benchmark, gained 47 cents to $74.76 per barrel. Stock markets open higher on last trading day of the week In currency trading, the U.S. dollar edged up to 151.85 Japanese yen from 151.35 yen, while the euro slipped slightly to $1.0380 from $1.0383.

Texas Governor Greg Abbott has banned the use of Chinese artificial intelligence company DeepSeek on government-issued devices, making Texas the first U.S. state to impose such a restriction on the popular chatbot. The emerging AI platform has recently gained widespread attention in the U.S., shaking up the AI industry. Abbott also prohibited the use of the Chinese-owned social media apps Xiaohongshu—commonly referred to as RedNote—and Lemon8 on all state-issued devices. "Texas will not allow the Chinese Communist Party to infiltrate our state's critical infrastructure through data-harvesting AI and social media apps," Abbott said in a statement. "Texas will continue to protect and defend our state from hostile foreign actors." Italy blocks access to the Chinese AI application DeepSeek to protect users' data The governor's office declined to provide further comments on the matter. AI startup DeepSeek has drawn significant market interest by demonstrating its ability to compete with industry leader OpenAI. In recent weeks, Xiaohongshu has seen a surge in American users, particularly after the short-lived TikTok ban. The app is widely popular in China and neighboring countries like Malaysia and Taiwan, with around 300 million active users. Many Americans had turned to it as a TikTok alternative and a way to protest the ban. Lemon8, owned by ByteDance—the parent company of TikTok—also gained traction in the lead-up to the initial TikTok ban on Jan. 19. Texas, along with several other states and the federal government, has already banned TikTok on government devices. The app's future remains uncertain as former President Donald Trump issued an executive order granting ByteDance more time to divest TikTok’s U.S. operations. ByteDance did not immediately respond to a request for comment.

Chinese tech behemoth Alibaba has introduced its Qwen 2.5-Max AI model, boldly asserting that it has outpaced DeepSeek’s renowned DeepSeek-V3 model, reports First Post. Unveiled on the first day of the Lunar New Year, the launch of Qwen 2.5-Max highlights the intensifying competition within China’s AI sector, reflecting the pressure DeepSeek’s rapid ascent has exerted not only on global competitors but also on domestic ones. Asian stocks rise as DeepSeek panic fades Alibaba's cloud division revealed on WeChat that Qwen 2.5-Max outperformed OpenAI’s GPT-4, DeepSeek-V3, and Meta’s Llama-3.1-405B across various performance metrics. The timing of this announcement, during the Lunar New Year festivities, underscores the urgency felt by Chinese firms to maintain competitiveness against DeepSeek, which has made waves in the AI market since its January debut. DeepSeek’s Market Disruption DeepSeek’s sudden success, beginning with the launch of its AI assistant powered by the DeepSeek-V3 model on January 10 and followed by the R1 model on January 20, has disrupted the tech industry. The Chinese startup’s cost-effective approach to developing powerful AI has raised concerns in Silicon Valley, particularly as investors question the high development costs associated with leading US companies. In response, Chinese competitors are racing to enhance their models. ByteDance, for example, updated its flagship AI model shortly after DeepSeek’s R1 release, claiming it surpassed OpenAI’s GPT-1 in the AIME benchmark test, which assesses AI’s ability to comprehend and respond to complex commands. This move highlights how DeepSeek’s swift rise has spurred action among domestic firms, with Alibaba’s latest release being a response to DeepSeek’s innovations. The Emergence of a New Competitor: Kimi k1.5 from Moonshot Complicating the race further is Moonshot AI’s new Kimi k1.5 model, which launched just days after DeepSeek’s R1. Kimi k1.5 is being regarded as a direct rival to both DeepSeek’s models and OpenAI’s GPT-4, with reports suggesting it outperforms both on key benchmarks. Unlike DeepSeek-R1, which lacks multimodal capabilities, Kimi k1.5 is a multimodal model capable of processing and reasoning across text, images, and code, giving it a substantial advantage for tasks requiring both visual and textual data. Kimi k1.5 has also been developed at a fraction of the cost compared to similar cutting-edge AI models in the US, positioning Moonshot AI as a growing force in the global AI arena. Its advanced reinforcement learning techniques further enhance its versatility, making it highly adaptable to a range of applications. How DeepSeek stacks up against ChatGPT and Gemini Shifting Dynamics in China’s AI Industry China’s rising influence in AI is becoming increasingly apparent, as companies like DeepSeek, Alibaba, and Moonshot AI challenge the longstanding dominance of US tech giants. The launch of DeepSeek-V2 last May ignited an AI price war in China, prompting Alibaba’s cloud division to reduce prices by up to 97%. This price-cutting strategy has since become common practice among Chinese firms, including Baidu and Tencent, as they strive to develop AI models that can compete with OpenAI and other US-based giants. DeepSeek, led by Liang Wenfeng, has taken a distinct approach, operating more like a research lab with a lean team of graduates and PhD students. Liang’s vision of achieving artificial general intelligence (AGI) with significantly lower overhead than larger tech companies contrasts with the more costly, hierarchical models of Alibaba and other Chinese tech giants. As China’s AI sector continues to evolve at a rapid pace, its influence on the global market grows. The competition between DeepSeek, Moonshot AI, and Alibaba marks a crucial shift in the AI landscape, with these startups and tech giants pushing the boundaries of AI development. The race for AI supremacy is underway, and China is leading the way.

Asian stocks gained on Wednesday in subdued Lunar New Year trading, following a recovery on Wall Street driven by tech stocks, as concerns over Chinese AI company DeepSeek dissipated, reports AP. Most Asian markets were closed for the holiday. Investors were turning their attention to the Federal Reserve’s upcoming interest rate decision. U.S. futures showed little movement, and oil prices declined. Tech stocks slide as Chinese rival threatens AI industry; Nvidia falls 17%  In Tokyo, the Nikkei 225 index rebounded from Tuesday’s losses, rising 1% to 39,414.78. Australia’s S&P/ASX 200 climbed 0.6% to 8,447.00, following data from the Australian Bureau of Statistics that revealed a 0.2% rise in the Consumer Price Index for the December 2024 quarter, the smallest increase since the June 2020 quarter during the COVID-19 downturn. India's Sensex gained 0.7%, while Thailand’s SET index dropped 0.2%. On Tuesday, tech stocks bounced back after suffering a drop on Monday due to doubts about the sustainability of the AI investment boom. The S&P 500 increased by 0.9% to 6,067.70, recovering more than half of its earlier losses. The Dow Jones Industrial Average added 0.3% to 44,850.35, and the Nasdaq composite surged 2% to 19,733.59 after falling 3.1% the previous day. The focus remained on Nvidia, whose chips are central to the AI boom. The stock rose 8.8% after a nearly 17% drop on Monday, its worst plunge since the 2020 COVID crash. Other AI-related companies also saw steadier performance, including Broadcom, which rose 2.6%. Constellation Energy gained 1.4% after a sharp 21% drop on Monday. The company had earlier surged due to expectations it would supply electricity to the growing AI data center industry. Asian shares gain after S&P 500 climbs to a record and Bank of Japan raises rate These revenue prospects were threatened when DeepSeek, a Chinese firm, claimed to have developed a large language model that can compete with U.S. rivals at a much lower cost. This raised doubts about the future demand for AI chips and electricity. AI-related stocks had been Wall Street’s biggest performers in recent years, driven by the belief that AI spending would continue to rise. However, concerns have emerged that stock prices may have risen too quickly. The impact of DeepSeek’s development on the AI industry remains unclear. While it could reduce growth in demand for data centers, electricity, and chips, it may stimulate growth in other sectors. Later this week, major companies such as Apple, Meta Platforms, Microsoft, and Tesla are expected to report their earnings. A U.S. report showing weaker-than-expected consumer confidence had minimal impact on the bond market. The key event of the day was the Federal Reserve’s interest rate decision, which is expected to leave the federal funds rate unchanged. If this holds, it would mark the first meeting since September without a rate cut aimed at stimulating the economy. On Wednesday, U.S. benchmark crude oil fell by 8 cents to $73.69 per barrel. Brent crude, the international standard, lost 12 cents, to $76.37 per barrel. In currency markets, the U.S. dollar dropped to 155.21 Japanese yen from 155.53 yen. The euro was valued at $1.0437, up from $1.0432.

Donald Trump has said that DeepSeek, a Chinese startup, should serve as a "wake-up call" for America's AI industry, reports Sky News. The US President aims for US tech companies to dominate the field but recognises the challenge posed by DeepSeek, which claims to have a technical edge over American competitors. DeepSeek asserts that its AI models are comparable to those of US giants like OpenAI (the creator of ChatGPT) and Google’s Gemini, yet at a much lower cost. This has led to a dip in stock prices, particularly for chipmaker Nvidia, which experienced its largest one-day loss in history, it said. DeepSeek: China’s AI breakthrough shakes tech industry, Wall Street However, Trump views DeepSeek’s success as potentially beneficial for US AI goals. Speaking in Florida, he remarked that the emergence of AI from a Chinese company should motivate American industries to focus on competing effectively. He highlighted DeepSeek’s ability to operate with fewer computing resources as an advantage, suggesting this could lead to cost savings without compromising performance. On Monday, DeepSeek's app overtook ChatGPT in downloads on the Apple App Store. OpenAI’s CEO, Sam Altman, acknowledged the model’s competitiveness in a post on X, praising DeepSeek’s R1 “reasoning” model, which answers questions. However, Altman remained confident, asserting that OpenAI would continue to produce superior models, the report said. DeepSeek, founded in Hangzhou, China in 2023 by Liang Wenfeng, who previously co-founded High-Flyer, a top Chinese hedge fund, built a cluster of 10,000 Nvidia chips to power its AI systems before the US imposed restrictions on chip sales to China. The company now uses Nvidia's lower-performing chips, which are not banned in China, indicating that cutting-edge technology might not be essential for AI development. Asia shares mixed as US tech selloff amid DeepSeek arrival In January 2024, DeepSeek launched R1, an AI model claimed to be on par with similar offerings from US companies but at a reduced cost for specific tasks. Since its chatbot app launch, it has surpassed ChatGPT in downloads, added the report. Concerns have emerged that DeepSeek could undermine a $500 billion AI investment by OpenAI, Oracle, and SoftBank in the Stargate project, announced by Trump last week, which aims to expand computing power for AI. While DeepSeek's rise has attracted attention, it has not been without setbacks. The company recently reported experiencing large-scale cyberattacks, including one on Monday that disrupted user registration on its platform.

The Chinese AI model, DeepSeek, has skyrocketed to global prominence, becoming the most downloaded app on Apple’s App Store since its release on January 20. Initially captivating AI enthusiasts, it soon grabbed the world’s attention, with U.S. President Donald Trump calling it a “wake-up call” for American companies to focus on innovation. What sets DeepSeek apart is its cost-effective design—built at a fraction of the cost of leading models like OpenAI’s, thanks to fewer advanced chips. This development sent shockwaves through the market, causing Nvidia to lose nearly $600 billion in market value, marking the largest single-day loss in U.S. history. Tech stocks slide as Chinese rival threatens AI industry; Nvidia falls 17%  Strategic Implications DeepSeek raises questions about the efficacy of Washington’s tech sanctions on China, particularly its export ban on advanced chips. Undeterred, China has doubled down on AI, with President Xi Jinping emphasizing its strategic importance as the country pivots from traditional manufacturing to advanced tech industries. What Is DeepSeek? At its core, DeepSeek is an AI chatbot similar to ChatGPT, powered by the R1 model with 670 billion parameters, making it the largest open-source language model to date. It rivals OpenAI’s models in mathematics, coding, and reasoning while adhering to Chinese government censorship. Despite its capabilities, DeepSeek operates on a modest budget of $6 million, significantly less than the billions spent by competitors. This was reportedly achieved by combining a stockpile of Nvidia A100 chips with cheaper alternatives. The Visionary Behind DeepSeek DeepSeek’s founder, Liang Wenfeng, a Zhejiang University alumnus with expertise in electronic engineering and finance, launched the company in December 2023. Known for his innovative approach, Liang previously led China’s first quant hedge fund, High-Flyer, and has long advocated for China to close the innovation gap with the U.S. Global Repercussions DeepSeek’s rise challenges the notion that massive budgets and cutting-edge chips are essential for AI advancement. Analysts suggest this could disrupt the business models of U.S. tech giants like OpenAI. The uncertainty triggered a tech sell-off on January 27, with the Nasdaq falling over 3% and Nvidia losing its top valuation spot to Apple and Microsoft. Trump says Microsoft is one of the companies eyeing TikTok China’s Reaction While the Chinese government has remained silent, state media is hailing DeepSeek as a symbol of the nation’s growing technological prowess. Experts warn, however, that such developments could fuel “tech isolationism,” as China emphasizes self-reliance. DeepSeek’s emergence signals a transformative moment for the AI industry, reshaping global tech dynamics and challenging the U.S.’s dominance. With input from agencies