Baidu, China’s tech giant, is set to unveil the next version of its AI model, Ernie 5, in the second half of 2025. This new iteration will introduce multimodal capabilities, allowing it to process and convert a variety of formats such as text, video, images, and audio, offering significant advancements in AI technology.
The release is timed to respond to increasing competition in China’s rapidly developing AI sector, particularly from the startup DeepSeek. The company has gained attention with a reasoning model that rivals OpenAI’s GPT while offering lower costs. Despite being one of the first to enter the AI space in China after the debut of ChatGPT in 2022, Baidu has faced challenges in gaining widespread adoption of its Ernie model.
Baidu’s AI offerings have struggled to keep pace with competitors like ByteDance’s Doubao chatbot and DeepSeek in terms of user uptake. The company maintains that its latest version, Ernie 4, is comparable to OpenAI’s GPT-4, but the adoption rate has been slower than anticipated. CEO Robin Li acknowledged the unpredictable nature of innovation, noting DeepSeek’s rise as a reminder that the future of AI is uncertain and can emerge from unexpected places.
Li also stressed the importance of continued investment in data centres and cloud infrastructure to keep up with the evolving demands of AI, even as newer models, such as DeepSeek’s, challenge the cost-efficiency of large AI models.
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Baidu CEO Robin Li stated on Tuesday that investment in data centres and cloud infrastructure remains crucial despite the challenge posed by Chinese AI startup DeepSeek. Speaking at the World Government Summit in Dubai, Li emphasised that smarter AI models require increased computing power, or “compute,” to function effectively. His comments come as DeepSeek has gained attention for creating language models that perform similarly to OpenAI’s GPT while using much less computing power, prompting debate over the need for large-scale AI infrastructure.
Baidu, a key player in China’s AI development, was quick to launch its own AI products after the release of OpenAI’s ChatGPT in late 2022. However, its own language model, Ernie, has seen limited public adoption, despite claims that it rivals GPT-4 in capability. Li, who previously argued that no OpenAI-like company would emerge from China, admitted at the summit that innovation in AI is unpredictable, as shown by DeepSeek’s rapid rise.
In a shift from his earlier stance on AI development, Li acknowledged that open-source models could play a significant role in accelerating AI adoption. While he had previously advocated for closed-source approaches, he now recognises that allowing greater access could foster wider experimentation and faster technological spread. This marks a notable change in Baidu’s approach to the evolving AI landscape.
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France is set to announce private sector investments totalling around 109 billion euros ($112.5 billion) in its AI sector at the Paris AI summit, according to President Emmanuel Macron. The investment package includes 20 billion euros from Canadian investment firm Brookfield and up to 50 billion euros from the United Arab Emirates, which will also fund a 1-gigawatt data centre.
Brookfield’s investment is expected to focus on developing data centre infrastructure, crucial for AI technology that requires massive amounts of energy to operate.With the demand for AI technology rising, Europe is aiming to secure necessary investments to meet the growing need for energy and infrastructure.
This comes amid global competition, as US President Donald Trump recently announced that companies like OpenAI, SoftBank, and Oracle would invest $500 billion in AI infrastructure over the next four years to ensure the US stays ahead in the global AI race.
OpenAI announced on Thursday that it is evaluating US states as potential locations for data centres supporting its ambitious Stargate project, which aims to secure the US’s lead in the global AI race. The project is seen as crucial for ensuring that AI development remains democratic and open, rather than falling under authoritarian control, according to Chris Lehane, OpenAI’s chief global affairs officer.
Stargate, a venture backed by SoftBank, OpenAI, Oracle, and other investors, is set to receive up to $500 billion for AI infrastructure. A significant portion of this investment, $100 billion, will be deployed immediately, with the rest scheduled over the next few years. Texas has been designated as the flagship location for Stargate’s data centres. An initial site under construction in Abilene is expected to begin operations later this year.
The announcement follows the rise of DeepSeek, a Chinese AI model that challenges the traditional view that AI development requires large, specialised data centres. DeepSeek’s use of cheaper chips has raised concerns among investors, leading to a significant drop in tech stock values, including a record $593 billion loss for Nvidia, the leading AI chipmaker.
OpenAI is considering data centre locations in approximately 16 states, with plans to expand the Stargate network to five to ten campuses in the coming months.
Chinese companies are increasingly backing DeepSeek‘s AI, marking a pivotal moment for the industry. Firms like Moore Threads and Hygon Information Technology are enabling their computing clusters to support DeepSeek’s R1 and V3 models, which use domestically produced graphic processing units (GPUs). Analysts have hailed this as a ‘watershed moment,’ particularly as these models rival those run on global high-end chips.
Huawei has also joined the trend, integrating DeepSeek’s models with its Ascend cloud service and partnering with AI infrastructure start-up SiliconFlow. This integration showcases the growing potential of Chinese-made chips to support competitive large language models, reducing reliance on US hardware. Additionally, major Chinese tech companies such as Alibaba, Baidu, and Tencent have made DeepSeek’s models available through their cloud services.
DeepSeek’s rise has captured significant attention, especially after the launch of its free AI assistant, which surpassed ChatGPT in app downloads within days. The company’s approach, requiring far less computing power than its US counterparts, has further fueled its success. While DeepSeek is gaining traction globally, some countries, including Italy and the Netherlands, have raised privacy concerns, leading to investigations and blocks on its app.
Spanish oil company Repsol plans to invest 4 billion euros ($4.2 billion) in building data centres near Zaragoza, according to a report by Expansion newspaper. The planned investment marks Repsol’s significant move into the tech sector, aiming to capitalise on the growing demand for cloud computing infrastructure.
Zaragoza is becoming a key hub for cloud services, with major tech companies like Amazon and Microsoft already making large investments in the region. Repsol’s project will contribute to the area’s growing reputation as a leading destination for data centre development.
The company has not yet commented on the report, and details on the project’s timeline remain unclear. This move signals a shift for Repsol as it expands beyond its core oil business into digital services.
Stargate, a new joint venture formed by OpenAI, SoftBank, and Oracle, aims to build data centres across the US to support the growing demands of AI. According to a report by the Financial Times on Thursday, these data centres will be dedicated solely to OpenAI, the company behind the popular ChatGPT. The collaboration between these tech giants underscores the increasing importance of robust infrastructure to power the next wave of AI innovation.
The exclusive focus on OpenAI’s needs comes when AI technologies rapidly expand, with the demand for high-performance computing capabilities soaring. The partnership will allow OpenAI to scale its operations and provide the necessary computing power for its cutting-edge AI models. As companies worldwide race to develop more advanced AI tools, the infrastructure provided by Stargate is expected to play a crucial role in supporting the next generation of AI services.
Oracle and SoftBank’s involvement brings significant expertise in cloud infrastructure and global telecom, making the venture a powerful alliance in the competitive AI landscape. The project highlights the growing intersection of cloud computing, data storage, and AI as companies like OpenAI push the boundaries of what AI can achieve.
ByteDance, the Chinese tech giant behind TikTok, has allocated over 150 billion yuan ($20.64 billion) for capital expenditure this year, with a significant focus on AI, according to sources familiar with the matter. About half of the investment will support overseas AI infrastructure, including data centres and networking equipment. Beneficiaries of this spending are expected to include chipmakers Huawei, Cambricon, and US supplier Nvidia, although ByteDance has denied the accuracy of the claims.
The investment aims to solidify ByteDance’s AI leadership in China, where it has launched over 15 standalone AI applications, such as the popular chatbot Doubao, which boasts 75 million monthly active users. Its international counterparts include apps like Cici and Dreamina, reflecting ByteDance’s strategy to adapt its AI offerings globally. The company also recently updated its flagship AI model, Doubao, to rival reasoning models like those developed by Microsoft-backed OpenAI.
ByteDance’s international spending aligns with its efforts to expand AI capabilities abroad amid challenges like the uncertain future of TikTok in the United States. While ByteDance’s $20 billion plan is substantial, it remains modest compared to the AI investments of US tech giants like Google and Microsoft, which spent $50 billion and $55.7 billion respectively on AI infrastructure in the past year. The spending will also bolster ByteDance’s partnerships with suppliers such as Nvidia, from which it has procured custom AI chips tailored to China despite US export restrictions.
President Donald Trump unveiled a $500 billion private-sector initiative on Tuesday aimed at transforming AI infrastructure in the US. The joint venture, called Stargate, brings together OpenAI, SoftBank, and Oracle to build 20 massive data centres and create over 100,000 jobs. Backers have committed $100 billion for immediate deployment, with the remainder spread over the next four years.
The announcement, made at the White House with SoftBank CEO Masayoshi Son, OpenAI CEO Sam Altman, and Oracle Chairman Larry Ellison in attendance, underscores America’s push to lead in AI development. Ellison revealed that the first data centres, each half a million square feet, are already under construction in Texas. These facilities aim to power advanced AI applications, including analysing electronic health records to assist doctors.
Trump attributed the project’s launch to his leadership, with executives expressing their support. “We wouldn’t have decided to do this unless you won,” Son said. However, the ambitious project arrives amid concerns over the rising energy demands of AI data centres. Trump promised to simplify energy production for these facilities, even as experts warn of potential power shortfalls across the country in the coming decade.
The announcement comes against a backdrop of surging AI investments since OpenAI’s release of ChatGPT in 2022, which sparked widespread adoption of AI across industries. Oracle and other tech stocks, including Nvidia and Dell, climbed on the news, reflecting market enthusiasm for the Stargate project.
Italy is poised to see a dramatic rise in data centre investments, with spending expected to double to €10 billion between 2025 and 2026, according to Milan Polytechnic University. The increase in funding is fuelled by global technology giants expanding their cloud capabilities to meet surging demand driven by AI.
Recent commitments include Microsoft’s €4.3 billion plan to grow its cloud network in Italy and Amazon Web Services’ €1.2 billion investment over five years. These projects highlight Italy’s potential as a hub for cloud development. However, challenges such as high energy costs and potential power grid bottlenecks could hinder the country’s ability to fully capitalise on these opportunities.
Experts warn that the sustainability of Italy’s electricity grid will play a critical role in accommodating the expansion of powerful cloud infrastructure. Despite these hurdles, the investment wave signals growing confidence in Italy’s tech ecosystem, reflecting its strategic importance in Europe’s digital transformation.