The difference between "He is baking a cake" and "He bakes a cake" lies in their tense and aspect. Both phrases are grammatically correct, but they convey slightly different meanings.
"He is baking a cake" is in the present progressive tense (also known as the present continuous tense) and emphasizes an ongoing action happening in the present. This construction implies that the person is currently in the process of baking a cake, and the action is not yet completed.
"He bakes a cake" is in the simple present tense and describes a habitual or regular action. This sentence suggests that the person regularly engages in the activity of baking a cake. It does not provide information about whether the action is happening at the moment of speaking or not.
So, while both phrases refer to the action of baking a cake, they differ in terms of the timeframe and the focus on ongoingness. The first sentence emphasizes the current activity of baking, while the second sentence presents it as a habitual or repeated action.