Feb 12 (Reuters) - China's Baidu ( BIDU ) is set to

launch the next iteration of its artificial intelligence model

in the second half of 2025, a person with direct knowledge of

the matter told Reuters.

The new model, Ernie 5, will feature multimodal capabilities

enabling it to process and convert between different formats

including text, video, images and audio, CNBC reported earlier.

The planned release comes amid intensifying competition in

China's AI sector, notably from startup DeepSeek, which gained

prominence after launching a reasoning model that matches

OpenAI's GPT performance at lower costs.

Despite being among China's first movers in AI following

ChatGPT's 2022 debut, Baidu ( BIDU ) has struggled to gain widespread

adoption for its Ernie large language model, even as the company

claims its latest version, Ernie 4, matches OpenAI's GPT-4

capabilities.

The tech giant's AI offerings have lagged domestic

competitors, including ByteDance's Doubao chatbot and newcomer

DeepSeek, in terms of user adoption.

Baidu ( BIDU ) CEO Robin Li told attendees in a conference held in

Dubai on Tuesday that DeepSeek's sudden emergence demonstrated

the unpredictable nature of innovation.

"You just don't know when and where innovations come from,"

he said.

During the event, Li also said that investment in data

centres and cloud infrastructure is still needed despite

DeepSeek challenging the cost efficiency of large AI models.