Baidu Shares Surge as ERNIE AI Bot Goes Free
Baidu's stock soared after the company announced its ERNIE AI bot will be offered free starting in April. The move follows China's launch of DeepSeek, a cost-effective AI bot that has generated global interest.
Analysts anticipate increased demand for AI in China, driving growth in the tech sector. Chinese tech stocks are experiencing an AI renaissance after lagging behind in recent years.
On Thursday, Baidu surged to a four-month high after revealing that its ERNIE AI bot would be free from April 1st. Baidu introduced ERNIE Bot, similar to ChatGPT, in March 2023 and attributed the free offering to "inference cost reductions" during AI computation.
Advanced versions of ERNIE Bot previously cost 59.9 yuan ($8.20) per month. Baidu's Hong Kong-listed shares climbed nearly 12%, eventually closing 5.7% above opening prices. The stock has gained 13.7% year-to-date.
On Nasdaq, Baidu shares closed 4.4% higher at $93.34, with a 10.7% increase so far this year. Other Chinese tech giants also saw gains: Alibaba extended gains by 2.6% in Hong Kong, rising 41.6% overall. Alibaba on the New York Stock Exchange closed 4.9% higher and has gained almost 40% year-to-date.
Short video platform Kuaishou surged 6.3% in Hong Kong. The AI-driven stock rally boosted the Hang Seng Tech Index to near three-year highs before closing 0.9% lower.
The rise in Chinese tech stocks aligns with the emergence of affordable AI models from DeepSeek. Analysts from Nomura suggest that DeepSeek's cost-efficient approach could stimulate demand for domestic AI solutions and drive advancements in China's AI industry.