Baidu Inc., China's leading search engine giant, has unveiled two new artificial intelligence models, ERNIE 4.5 and ERNIE X1, aiming to enhance its competitive position in the rapidly evolving AI industry. ERNIE X1, a deep-thinking reasoning model with multimodal capabilities, reportedly delivers performance on par with DeepSeek's R1 model at only half the cost. The company stated that ERNIE X1 enhances planning, reflection, and autonomous tool use, positioning it as a formidable competitor in the AI reasoning domain. ERNIE 4.5, Baidu's latest foundation model and native multimodal model, is said to outperform OpenAI's GPT-4.5 in several benchmarks while costing just 1% of GPT-4.5's price. The model advances language, logic, and memory capabilities, highlighting Baidu's commitment to AI innovation and cost efficiency. In addition to launching the new models, Baidu announced that its AI chatbot services, including ERNIE Bot, are now freely available to individual users ahead of schedule. This move reflects the intensifying competition among AI firms, both domestically and internationally, as they strive to attract users with more advanced and affordable AI solutions. The release of ERNIE 4.5 and ERNIE X1 underscores the growing competitiveness of China's AI industry, with Baidu challenging established players such as DeepSeek and OpenAI. Analysts suggest that these developments could signal the beginning of an AI price war, as companies seek to offer high-performance models at lower costs.