Baidu CEO Claims More AI Spend Is Needed as US Giants Prepare To Spend $300B in 2025

• Baidu CEO Robin Li has said more spending will be needed to create better AI models than anyone else.
• The comments come after Baidu’s Chinese rival DeepSeek soared to success with its latest model reportedly developed with just $6 million.
• In 2025, Microsoft, Meta, Amazon and Google are expected to spend over $300 billion on AI infrastructure.

Robin Li, CEO of Chinese technology giant Baidu, has claimed that more investment in cloud infrastructure and data centers is needed for AI development despite the recent cost-efficient success of China-based DeepSeek.

The comments come as leading U.S. AI giants are ramping up for another expensive year of development, with forecasts estimating a combined spend of over $300 billion.

More AI Spend Needed

Talking on Tuesday, Feb. 11, at the World Government Summit in Dubai, Li said that more money was needed to create competitive AI models.

“The investment in cloud infrastructure is still very much required. In order to come up with models that are smarter than everyone else, you have to use more compute,” Li stated.

Baidu has been a key player in China’s AI race as it became one of the first Chinese companies to launch rival AI products to OpenAI’s ChatGPT.

The company previously claimed that its ChatGPT rival Ernie has matched the power of OpenAI’s models.

DeepSeek’s Influence

The release of the DeepSeek-R1 chatbot in January sent shockwaves through the U.S. market, casting doubt over the dominance of leading U.S. firms that have been investing billions of dollars into training and development.

DeepSeek’s V3 model was reportedly trained on just $6 million.

This was a significantly smaller budget than that of companies such as OpenAI, which is estimated to have spent over $100 million on its GPT-4 model.

Despite the disparity in funding, DeepSeek has demonstrated that smaller-scale investments can yield impressive results, challenging the notion that only the most prominent players with the deepest pockets can develop cutting-edge AI systems.

For many, DeepSeek’s success has underscored a shift in the AI landscape, where efficiency and innovation in training methodologies may begin to rival sheer computational power and financial backing.

If this trend continues, it could force major players to rethink their strategies and optimize their spending.

Big Tech Remains Spending Focused

Over the past few years, Big Tech has been increasing its spending on AI development to astronomical levels.

Last year marked a historical record of spending on technology, with the four leading technology companies increasing their output by 63%.

Microsoft, Alphabet, Amazon and Meta have reported combined spending of $246 billion in 2024, a significant increase from $151 billion in 2023.

In 2025, the tech giants forecast they will spend $320 billion, as the race continues to build data centers and compute, the Financial Times reported.