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Jon Keegan

Baidu gets its own “reasoning” AI model

While DeepSeek’s fast, cheap, and open-source AI models may be getting all of the world’s attention, Baidu, one of China’s largest tech companies, is competing head-to-head with the smaller startup.

This weekend, Baidu released two new models: Ernie 4.5, its updated foundational model, and Ernie X1, a new “reasoning” model to compete with DeepSeek’s R1.

The company said Ernie 4.5 beat OpenAI’s GPT-4.5 on multiple benchmarks for “just 1% of the price,” according to a press release. Both models are free for individual users of the “Ernie Bot” chatbot.

Baidu is touting Ernie X1’s reasoning ability, but also its price:

“As a deep-thinking reasoning model with multimodal capabilities, ERNIE X1 delivers performance on par with DeepSeek R1 at only half the price.”

Baidu’s stock was up over 1% in early trading this morning.

The company said Ernie 4.5 beat OpenAI’s GPT-4.5 on multiple benchmarks for “just 1% of the price,” according to a press release. Both models are free for individual users of the “Ernie Bot” chatbot.

Baidu is touting Ernie X1’s reasoning ability, but also its price:

“As a deep-thinking reasoning model with multimodal capabilities, ERNIE X1 delivers performance on par with DeepSeek R1 at only half the price.”

Baidu’s stock was up over 1% in early trading this morning.

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Alphabet, Amazon, Microsoft, and Meta plan to spend more than $700 billion on capex this year

Big Tech’s big capital spending continues to surge even higher than the companies had previously expected.

Alphabet raised its 2026 capex outlook to between $180 billion and $190 billion, up from $175 billion to $185 billion. Meta increased its 2026 forecast to $125 billion to $145 billion, up from $115 billion to $135 billion. Microsoft, meanwhile, said it’s planning on spending $190 billion this calendar year, about $55 billion more than the FactSet analyst consensus. Amazon, the lone outlier, didn’t boost its capex forecast, keeping it at a cool $200 billion.

Combined, Alphabet, Amazon, Microsoft, and Meta plan to spend more than $700 billion on capex in 2026, nearly double what they spent last year and $100 billion more than they’d expected just last quarter, as they continue to build out the AI infrastructure to support their AI futures.

big 4 tech capex meta microsoft google amazon
Sherwood News
Microsoft AI Tour

Microsoft’s capex outlay this year would be enough to buy every outstanding share of Disney

CFO Amy Hood said on last night’s earnings call that the company will spend $190 billion on capex in 2026.

Senate bipartisan Artificial Intelligence (AI) Insight Forum on Capitol Hill in Washington

A tale of two capex increases: Why investors are responding to Google and Meta so differently

Two Big Tech companies posted stellar earnings and upped their capex forecasts. One stock is up, one is down.

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