Chinese tech giant Baidu has undertaken the most significant overhaul of its core search platform in a decade, bolstering it with advanced artificial intelligence capabilities. This extensive update is a strategic response to the evolving digital landscape and increasing pressure from fast-moving rivals, particularly AI services and short video platforms that are disrupting the traditional search market.

Analysts note that while Baidu's search business has faced some minor pressure, the focus on AI and its proprietary Ernie Bot is a critical forward-looking move. Ernie Bot, Baidu's AI chatbot, was first released to the public in 2023, positioning Baidu as an early AI mover in China. The company has since aggressively launched updated AI models to maintain its competitive edge.

The disruption to the search market is evident as users increasingly gravitate towards AI services like OpenAI's ChatGPT and the advanced DeepSeek model. Additionally, short video platforms such as Douyin and Kuaishou are also venturing into AI-powered search, further intensifying the competitive pressure on Baidu. This trend is not unique to China, as Google outside of China has also been actively enhancing its core search product with AI to address similar market shifts.

To counter these challenges and innovate its offering, Baidu has introduced several major changes to its search product. Users can now input over a thousand characters in the search box, a substantial increase from the previous limit of 28. Queries can be posed in a more direct and conversational manner, mirroring the natural interaction style of modern chatbots. Furthermore, the updated platform allows users to ask questions through voice, and even prompt the search engine with pictures and various files. Critically, Baidu has integrated generative AI features from its Ernie Bot, enabling users to produce photos, text, and videos directly within the search product, aligning its functionality with how users engage with leading AI services like ChatGPT and DeepSeek for answers.

Despite its proactive AI strategy, Baidu faces intense competition from fellow tech giants such as Alibaba and Tencent, as well as newer upstarts like DeepSeek. These companies are also actively launching new models and embedding AI into their respective products. This competitive environment has impacted Baidu's stock performance, with its shares rising around 2.5% this year, notably lagging behind Alibaba's 30.5% surge and Tencent's 20% rise. Industry experts view Baidu's latest moves as both defensive and offensive, emphasizing the company's need to assert its leadership in the AI domain and demonstrate it is not secondary to competitors like Tencent on the artificial intelligence front.