- Baidu shares soared after the company said its ERNIE AI bot will be free in April.
- Baidu’s move followed China’s cost-efficient DeepSeek AI bot, which took the world by storm.
- Analysts see potential for increased demand in China’s AI sector, spurring tech growth.
China’s tech stocks are having their own AI moment after missing out on the hype for the last few years.
On Thursday, Baidu — known as the Google of China for its widely used search engine — soared to a fourth-month high after announcing that its ERNIE AI bot would be available free of charge from April 1.
Baidu — which introduced ChatGPT-like ERNIE Bot in March 2023 — on Wednesday said it’s making its AI bot free in part thanks to “inference cost reductions,” which refers to the production stage of AI computing.
Baidu charges 59.9 yuan, or $8.20, a month for advanced versions of ERNIE Bot.
Hong Kong-listed Baidu shares surged nearly 12% before closing 5.7% higher. It is up 13.7% so far this year.
Nasdaq-listed Baidu shares closed 4.4% higher at $93.34 on Wednesday. The stock is up 10.7% this year to date.
Elsewhere, e-commerce giant Alibaba extended gains to close 2.6% higher in Hong Kong. The stock is 41.6% so far this year. Alibaba shares on the New York Stock Exchange closed 4.9% higher at $118.33 on Wednesday and are up nearly 40% to date.
Short video app Kuaishou gained 6.3% in Hong Kong.
The AI-fueled rally sent the Hang Seng Tech Index up to near a three-year high before closing 0.9% lower.
The robust performance in Chinese tech stocks comes amid the rise of the affordable Chinese AI models from DeepSeek.
The rally in Chinese tech stocks highlights how DeepSeek's cost-efficient model could spur developments in China's AI sector.
"For China's AI industry chain, we believe that DeepSeek's innovation, which achieved high performance with limited computing power, may lead to better demand for domestic AI solutions, including hardware and software/applications," wrote analysts from Nomura in a Wednesday note.