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Pictured here is the Ernie bot mobile interface, with the Baidu search engine home page in the background.

Future Publishing | Future Publishing | Getty Images

Chinese tech giant Baidu has released two new free-to-use artificial intelligence models as it vies to regain its leading position in the country’s fiercely competitive AI space. 

The Baidu models launched Sunday included the company’s first reasoning-focused model, and come ahead of plans to move toward an open-source strategy. 

However, experts told CNBC that while the release of the models is a positive development for Baidu, they also highlight how it is playing catch up as its Ernie bot — one of China’s earliest versions of a ChatGPT-like chatbot — struggles to gain widespread adoption. 

“The new models make Baidu more competitive since the company has been lagging behind in a reasoning model release,” Lian Jye Su, chief analyst at Omdia, told CNBC.

A reasoning model is a large language model that breaks down tasks into smaller pieces and considers multiple approaches before generating a response. It is designed to process complex problems in a similar way to humans.

Chinese startup DeepSeek upended the global AI race and transformed China’s ecosystem in January when it released its R1 reasoning model, which rivaled American competitors despite costing a fraction of the price.

Baidu has said its new ERNIE X1 reasoning model “delivers performance on par with DeepSeek R1 at only half the price,” and has “stronger understanding, planning, reflection, and evolution capabilities.” CNBC has not been able to independently verify this claim.

According to Wei Sun, principal analyst of artificial intelligence at Counterpoint Research, Baidu’s future competitiveness could hinge on whether its new models deliver on the promised performance and cost advantages. 

“Baidu is clearly in catch-up mode, largely due to its slow innovation pace and underestimating rapid shifts in market dynamics,” Sun said. 

What happened? 

Baidu rolled out its first generative AI platform to the public in 2023, giving China one of its first answers to OpenAI’s popular AI chatbot ChatGPT. 

However, despite initial momentum, Baidu’s Ernie product has since been eclipsed by competitors including startups as well as large-tech companies such as Alibaba and ByteDance.

Experts list a number of reasons for Baidu’s struggles and slow rate of innovation.

“Baidu fell behind when they tried to build proprietary models and compete for funding for AI,” Ray Wang, principal analyst and founder of Constellation Research, told CNBC. He added that the company has also suffered from recent government crackdowns and was distracted by “regulatory nonsense.” 

CFOTO | Future Publishing | Getty Images

Proprietary models keep their source code and underlying architecture confidential, in contrast to models from the likes of DeepSeek, whose source code is made freely available on the open web for possible modification and redistribution.

“Using a closed-source approach means that [Baidu] was training its model from scratch whereas the open-source models were able to leverage certain parts that were communal to developers,” said Kai Wang, a senior equity analyst for Morningstar. 

Baidu, however, said last month that it would make its next-generation AI model Ernie open-source from June 30, according to Reuters.

“Baidu has always been very supportive of its proprietary business model and was vocal against open source, but disruptors like DeepSeek have proven that open source models can be as competitive,” said Omdia’s Su. 

He added that Baidu is “merely following the footstep” of its biggest competitors in China, namely Alibaba, DeepSeek, and Tencent, which have all now released open-source models. 

Baidu’s advantages

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Amazon AI scammers duped investors out of millions with ‘passive income’ scheme, FTC alleges

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Amazon AI scammers duped investors out of millions with 'passive income' scheme, FTC alleges

Packages ride on a conveyor belt during Cyber Monday, one of the company’s busiest days at an Amazon fulfillment center on December 2, 2024 in Orlando, Florida. 

Miguel J. Rodriguez Carrillo | Getty Images

The Federal Trade Commission is going after an e-commerce company that allegedly took millions of dollars from consumers as part of a “passive income” scheme, which spun up Amazon storefronts on their behalf and promised “insane returns” that were higher than the stock market.

The FTC said Tuesday it filed a lawsuit against the company, called Click Profit; its co-founders Craig Emslie and Patrick McGeoghean; and two other business associates. It also asked a judge to bar the parties from doing business temporarily.

The case is the latest example of the FTC cracking down on e-commerce “automation” services. These companies launch and manage online storefronts on behalf of clients, who pay money for the services and the promise of earning tens of thousands of dollars in “passive income.” The companies often make extravagant claims about potential earnings and the use of artificial intelligence technology to guarantee profits. Despite their assurances, consumers frequently end up losing money.

Click Profit, which also operated under the names FBALaunch, Automation Industries and PortfolioLaunch, promised investors they would “build you a massively profitable e-commerce store from the ground up” by selling products on Amazon, Walmart and TikTok, according to the FTC.

The company charged consumers between $45,000 to $75,000 for the initial investment, plus an additional $10,000 or more to pay for inventory, the FTC alleged in its complaint, which was filed in the U.S. District Court for the Southern District of Florida. Click Profit took up to 35% of any profits from their customers’ stores, the complaint states.

The company claimed the business opportunity was “safe, secure and proven to generate wealth,” according to marketing materials referenced in the FTC’s complaint. They posted screenshots of purportedly successful Amazon storefronts, including one they claimed generated product sales of over $540,000 in one month.

Emslie often appeared in TikTok videos and other online ads to pitch prospective consumers. In one ad, he said that “the stock market, real estate or precious metals will never be able to offer you” the level of security offered through investing in Click Profit, according to the FTC’s complaint. Other TikTok videos show him appearing alongside an image of Warren Buffett while “fanning himself” with wads of cash, per the complaint.

Read more CNBC Amazon coverage

Click Profit talked up its expertise by claiming it had product sourcing partnerships with legitimate brands, including Nike, Disney, Dell, Colgate and Marvel, the complaint alleges. It also claimed to have spent $5 million to build a “super computer” and other AI technologies to locate the “most profitable products,” claiming the super computer had generated “around $100 million in sales,” per the complaint.

The company even implied that investors’ online store could be bought out by venture capital firms connected with Click Profit “at a 3-6x multiple,” the FTC alleged.

“In reality, the highly touted AI technology and brand partnerships do not exist, and the promised earnings never materialize,” the FTC said in its complaint.

Amazon suspended or terminated about 95% of Click Profit’s stores after they violated Amazon’s seller policies, the FTC alleged. After accounting for Amazon’s fees, more than one-fifth of Click Profit’s stores on the platform earned no money at all, while another third earned less than $2,500 in gross lifetime sales, the FTC stated.

As a result, most consumers were unable to recoup their investments and “some are saddled with burdensome credit card debt and unsold products,” according to the FTC, which also said that Click Profit often refused to refund victims their investments and threatened them with legal action if they posted publicly about their experience.

One unnamed consumer mentioned in the lawsuit invested “his life’s savings” in Click Profit and was later terminated as a client “with nothing to show for his payments,” the complaint states. He posted a negative review online and was allegedly approached by Emslie’s attorney, who threatened to sue the consumer and “take everything he and his wife owned,” per the complaint.

The consumer took the reviews down, then asked Emslie whether he could receive a partial refund, according to the FTC.

“The attorney told the consumer that Emslie had responded, ‘F*** off,'” the FTC alleged.

Representatives for Emslie and Click Profit didn’t immediately respond to a request for comment.

The FTC alleges Click Profit violated the FTC Act, the Consumer Review Fairness Act and the Business Opportunity Rule. It seeks to permanently prohibit Click Profit from doing business, as well as monetary relief for the victims.

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GrubMarket, largest private food tech company in U.S., reaches $3.5 billion valuation in new funding round

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GrubMarket, largest private food tech company in U.S., reaches .5 billion valuation in new funding round

Mike Xu, GrubMarket Founder and CEO

Courtesy: GrubMarket

Food logistics company GrubMarket said Tuesday that it has raised $50 million in a Series G funding round, valuing the San Francisco-based firm at more than $3.5 billion.

The new round includes Liberty Street Funds, 3Spoke Capital, ROC Venture Group, Portfolia, Pegasus Tech Ventures, Joseph Stone Capital, and other unnamed investors.

“GrubMarket has experienced an incredible acceleration in growth over the last 12 months – our revenues surpassed $2 billion in 2024, and we became the largest private food technology company in the United States, while continuing to maintain a strong and healthy financial bottom line,” founder & CEO Mike Xu said in a statement announcing the funding.

The company, founded in 2014, currently does business with more than 70 countries, serving businesses and consumers in all 50 states plus Canada, and has over 12,000 employees.

More coverage of the 2024 CNBC Disruptor 50

Despite a tough macroeconomic environment fueled by uncertainty surrounding tariffs, much of the company’s growth has come through acquisitions. Companies that GrubMarket acquires use its software suite, which includes sales and online ordering features, inventory management, lot traceability, and automated routing and logistics.

The company says the funding will be used to double down on artificial intelligence.

“As our business model is highly sustainable, this funding round was not a necessity, but rather an opportunity to align our valuation with the scale and strength of our business growth, our AI tech innovations, and the significant value we create for the industry,” Xu said.

The company’s Farm-GPT, an analytics tool powered by generative AI that uses real-time and historical pricing data from USDA and proprietary sources, helps farmers and growers maximize profits and optimize crop selection. It also has a broader GrubAssist suite of AI-powered virtual assistants delivering real-time business insights and analysis.

GrubMarket has been named to CNBC’s annual Disruptor 50 list the past two consecutive years, ranked No. 23 in 2024 and No. 41 in 2023.

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Google announces new health-care AI updates for Search

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Google announces new health-care AI updates for Search

A Google corporate logo hangs above the entrance to their office at St. John’s Terminal on March 11, 2025, in New York City.

Gary Hershorn | Corbis News | Getty Images

Google on Tuesday announced health-care updates to Search, including a way for people with specific health conditions to compare their experiences with others.

The company unveiled a new feature called “What People Suggest,” which uses AI to pull together online commentary from patients with similar diagnoses. A patient with arthritis would be able to look up how other people with the condition approach exercise, for instance. The feature is available on mobile devices in the U.S., Google said.

Google said it has also expanded its knowledge panels, or the information boxes that appear to the right of search results, to cover “thousands” more health topics. The panels are coming to new countries and languages, including Spanish, Japanese and Portuguese, starting on mobile devices.

The tech giant has launched several health-care projects and features over the years, but it has struggled to outline a consistent business strategy within the sector. The company built out a formal Google Health unit starting around 2018, which swelled to more than 500 employees, but it was dissolved in 2021.

Karen DeSalvo, Google’s chief health officer, told CNBC months later that the company was “still all-in on health.”

In recent years, many of Google’s health-care initiatives have centered around AI.

Google introduced artificial intelligence summaries called AI Overviews last year, and the feature shows a quick summary of answers to search questions at the very top of Search. The rollout was rocky, as users were quick to share examples AI tool giving incorrect and controversial responses, like encouraging users to add glue to pizza.

AI Overviews appear for some health-related queries, like “How do I know if I have the flu?” But some experts have encouraged users to use caution with these answers, according to a December report from The Senior List. Out of more than 200 health searches, a panel of medical experts said 70% Google’s AI Overviews were considered risky.

Google said Tuesday that recent health-focused advancements with its Gemini models have allowed the company to improve AI Overviews for health topics.

In late 2023, Google announced MedLM, a suite of AI models designed specifically for health-care, to help clinicians and researchers carry out complex studies, summarize doctor-patient interactions and complete other tasks.

The company also unveiled Vertex AI Search for Healthcare that year, which is a generative AI tool that clinicians can use to search for information across disparate medical records.

Watch: Google to acquire cloud security startup Wiz for $32 billion.

Google to acquire cloud security startup Wiz for $32 billion

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