Chinese tech companies, including Baidu and Alibaba, are experiencing fluctuations in their stock prices amid a growing focus on artificial intelligence (AI). Baidu's shares recently surged to a five-month high following the launch of its new AI model, ERNIE X1, which is designed to compete with DeepSeek’s R1 model, offering similar performance at half the cost. Meanwhile, Alibaba's stock also rose as the company intensifies its AI initiatives. The broader market context shows that China's push for AI innovation is gaining momentum, with various localities increasing support for AI technologies. Despite some gains, the Hang Seng Index faced a decline, closing down 551.19 points, or 2.23%, at 24,219.95, with Baidu's stock down 5.44% at the close. The Hang Seng Tech Index also saw losses, reflecting the mixed performance of tech stocks in the region. The competitive landscape is intensifying as Chinese firms aim to leverage AI advancements to enhance their global standing.