(May 18): Baidu Inc revenue topped estimates, buying the search leader time as it seeks to catch up in AI services after losing an early lead to rivals such as Alibaba Group Holding Ltd.
Revenue for the three months ended March slipped to 32.1 billion yuan, beating the average analyst estimate of 31.5 billion yuan. Net income for the period was 3.45 billion yuan. Its shares rose more than 3% in pre-market US trading.
Baidu, also a major player in self-driving robotaxis and chipmaking, led rivals in China’s post-ChatGPT development boom before Alibaba and ByteDance Ltd surpassed its text and video models on industry leaderboards. Billionaire founder Robin Li is now betting on a reset: that the rise of automated agents like OpenClaw could spawn a new ecosystem where Baidu has another chance to capture market share in both applications and cloud hosting.
“We should focus on how many agents are actually performing tasks for humans and delivering results,” Li said at Baidu’s annual developer conference last week. “This is closer to real value and the core of the industry than fruitless token consumption.”
Autonomous driving has been a rare bright spot for the 26-year-old company, but it’s hitting regulatory hurdles there. Beijing regulators suspended issuing new licences for self-driving vehicles after Baidu’s robotaxis stalled on Wuhan city streets in March, and the company has also paused its operations in Wuhan while the fault is being investigated. Baidu is now looking to expand its Apollo Go fleet beyond China to Europe and the Middle East.
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Its chip arm, Kunlunxin, is planning a dual listing in Shanghai and Hong Kong, as investor appetite for homegrown Nvidia alternatives grows during geopolitical tensions. Jefferies analysts led by Thomas Chong expect the Hong Kong listing to happen in the third quarter.
“Kunlunxin has a strong team that builds sustainable chip capability and supports Baidu search for more than 10 years,” Chong wrote in a note pre-results. “From industry perspective, the trend is shifting towards inference chips with increasing market share from domestic chips.”
Those businesses will help anchor a shift underway at the company. At the developers’ conference this month, Li and his lieutenants unveiled upgrades to a swath of agentic AI tools from code-free website builders to a general-purpose agent similar to the red-hot Manus. Those endeavours stole the spotlight from its Ernie 5.0 foundation model, which got no updates even as Li proclaimed the AI race no longer primarily about underlying technology.
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Baidu overhauled its reporting structure starting in the December quarter. Instead of breaking out total advertising revenue, it now discloses the performance of AI businesses spanning cloud, applications and marketing.
In cloud computing, Baidu has mirrored moves by rivals like Alibaba to raise prices for AI products, capitalising on a supply-demand imbalance during China’s ongoing compute crunch.
Baidu in February announced plans to issue its first dividend alongside a three-year stock buyback programme of as much as US$5 billion — signs of a maturing business returning capital to shareholders.
Uploaded by Evelyn Chan
