Major players have been scrambling to maintain dominance in the AI space ever since DeepSeek’s breakthrough. Baidu and OpenAI, two of the biggest names in AI, have announced changes to their chatbots. They have decided to make their advanced models free for users. This can’t help but be seen as a direct response to the rapid rise of DeepSeek’s AI models.
Also read: DeepSeek V3 is Here!
Baidu’s Ernie Bot Becomes Free
Chinese tech giant, Baidu, revealed that its AI chatbot, Ernie Bot, will be available for free on both mobiles and desktops starting April 1. Previously, premium features such as AI image generation were locked behind a paywall.
This decision occurs as China’s AI industry intensifies. After DeepSeek’s AI models became comparable to top-tier American AI models, the AI space went into a frenzy. Baidu’s decision to remove subscription fees for Ernie Bot is a sign that DeepSeek’s existence is a threat, and companies will do almost anything to retain users.
Baidu also announced that an upgraded version of Ernie Bot would be launched by June and, for the first time, made open-source (just like DeepSeek).
OpenAI Promises Free GPT-5
Just hours before Baidu’s announcement, OpenAI’s CEO, Sam Altman, took to X (formerly Twitter) to reveal plans for GPT-5. His post says that OpenAI will allow unlimited free access to the new model. He further states that paying users will still have the advantage of accessing an even more advanced version of GPT-5.
Since ChatGPT became mainstream, it hasn’t had the misfortune of a worthy rival. OpenAI then became synonymous with AI but with DeepSeek’s emergence, things are shaking up. This new announcement by OpenAI is a reflection of its attempts to maintain its forefront position.
This decision could have other ripple effects: there could be increased expectations for free-to-use AI models.
The DeepSeek Disruption
The success of DeepSeek shook up the entire industry and forced established tech giants to rethink user adoption strategies. The startup’s latest AI model, DeepSeek R1, surprised everyone when it delivered results comparable to leading Western models while keeping development costs significantly lower. DeepSeek then went mainstream for becoming a serious rival.
Also read: Deepseek Could Be the New OpenAI
In response, Baidu’s stock surged 12%, reaching approximately 95 Hong Kong dollars ($12.20) per share by Friday. The company’s performance has contributed to a 20% rise in the Hang Seng China Enterprises Index since January.
Chinese AI Startups Take the Lead
Baidu, Alibaba, and Tencent were once the undisputed leaders of China’s AI sector. However, in light of recent events, DeepSeek and Moonshot are threatening to take their positions:
- Moonshot AI: Launched its own ChatGPT competitor, Kimi, in late 2024. By January 2025, it had become the third-most visited AI chatbot in China, trailing only DeepSeek and ByteDance’s Doubao.
- Zhipu AI: This Beijing-based startup, backed by Alibaba and Tencent, has gained government support. However, it recently faced scrutiny from the U.S. Commerce Department, which added the company to its “Entity List,” accusing it of supporting China’s military. That claim was denied by Zhipu.
Does AI have a Free or Premium Future?
The latest developments raise an important question: Will AI chatbots remain free, or will companies eventually return to paid models? Historically, AI firms have used free access to attract users before introducing premium tiers. For example, ChatGPT launched as a free service before introducing paid plans. Baidu, too, previously charged users up to 59.9 yuan ($8.20) per month for Ernie Bot’s premium features.
Given the current battle for market shares, the pressure to provide free, high-quality services is mounting. However, offering free AI models comes with high operational costs and a lack of sustainability.
The Defining Moment
AI has always been marked by speedy developments. And now, the rate of development is at break-neck speed. This has birthed a competition that ultimately favors everyone. Users will never have to settle for the bare minimum and companies can feed off of each other’s success to create even better AI models.
