Baidu's new free AI model can't be used in the EU, Britain or South Korea

Baidu has given away a large new AI model. Whether a company can actually use it depends on where it operates and how much it earns.

On November 5, the Chinese search giant posted ERNIE 5.5 Flash Base to Hugging Face, the main public hub for AI models. It is an open-weight release: anyone can download the trained model and run it on their own hardware instead of paying for access through Baidu's servers.

The fine print is less generous. Baidu's custom license excludes the European Union, the United Kingdom and South Korea outright. It requires advance written permission, and fees set by separate agreement, once a business passes $50 million in annual related revenue. And it bars anyone from using the model or its outputs to improve any AI system that is not ERNIE.

Developers are paying attention anyway. On Hugging Face's public counters, likes for the higher-precision version of the download jumped from 39 to 383 between November 6 and November 7.

What Baidu released, and what it held back

The model is large but built to be cheap to run. It has 280 billion parameters, the internal settings a model learns in training. Only 14 billion of them work on any given piece of text, which cuts computing costs. Baidu says it trained the model on 33.5 trillion tokens, or chunks of text.

This is a base model: the raw result of initial training, before the tuning that turns it into a usable assistant. It cannot hold a conversation out of the box. It is aimed at companies with their own AI teams that want to customize a model for a specific industry or task. Baidu says a finished, chat-ready ERNIE 5.5 Flash will follow, with no date given.

Baidu claims the model beats rival Chinese base models of similar size, including DeepSeek's V4 Flash, on most of 30 tests. It reports 82.3 on one coding test, against 69.5 for DeepSeek's equivalent. It trails on some measures, including a Chinese-language fact-recall test. Every score comes from Baidu's own testing. Coverage so far, including from Tech City Authority and Gate News, notes that no independent group has checked them.

Four clauses a buyer should read first

First, geography. The license covers the world except the EU, the UK and South Korea. That applies to running the model, distributing it and using what it produces. A multinational with teams in those markets would need a different arrangement with Baidu. The license itself does not say why those regions are excluded.

Second, size. Commercial use carries no license fee up to $50 million in annual revenue, but users must send Baidu a one-time notice. Above that, they need written authorization before starting. The revenue test is broad: it counts the full revenue of any product that uses the model, even if that product also relies on other AI models, and adds up companies under common control. A small unit of a large group could trip the threshold.

Third, a ban on training other models. Outputs cannot be used to improve any other AI system. The license treats distillation, where one model is trained on another's answers, as creating an ERNIE derivative. So a company that builds a smaller, cheaper in-house model this way, a common practice, ends up with a model still bound by Baidu's license.

Fourth, branding and courts. Commercial products must display a "Powered by ERNIE" notice. Disputes go exclusively to Hong Kong courts under Hong Kong law. The usage policy also bars military uses and certain high-stakes automated decisions.

Baidu is moving the opposite way from its rivals

These terms mark a sharp turn for Baidu. When it released its ERNIE 4.5 family in July 2025, all ten models came under Apache 2.0, a standard license that allows commercial use almost anywhere with few conditions.

Its closest competitors have been heading toward fewer strings. DeepSeek published the production version of V4 Flash, the model Baidu benchmarks against, under the permissive MIT license at the end of July. Tencent put its full Hy3 model under Apache 2.0 in July. Coverage at the time said the move dropped the regional limits that had kept some Chinese models out of certain markets.

Regional carve-outs have precedent. Tencent's earlier community licenses, including one for an image model, used the same exclusion of the EU, UK and South Korea. MiniMax went further this year, keeping its H3 video model's free license out of the US as well. Its own FAQ cites a fast-changing regulatory environment and, for the US, ongoing copyright litigation over AI-generated video.

Baidu has not explained its choice. The practical effect is clear enough. Free downloads still spread ERNIE's name and build a developer base, while Baidu keeps a gate in front of the biggest commercial customers and stays out of three markets entirely.

For buyers, the lesson is that a free download is not the same as a free license. Companies choosing among Chinese open models now face real differences in legal terms, not just in test scores. A model under MIT or Apache 2.0 can be deployed and adapted with little negotiation. ERNIE 5.5 Flash Base may need a call to Baidu's lawyers first, and in three markets it is not available at all.