Baidu Inc. reported a smaller-than-expected decline in revenue, reassuring investors about its ability to compete in the AI market. The company’s revenue for Q4 2024 reached 34.1 billion yuan ($4.7 billion), exceeding analysts’ forecast of 33.4 billion yuan. Net profit saw a significant rise, reaching 5.19 billion yuan ($711 million), nearly double the 2.6 billion yuan recorded a year earlier and well above the expected 3.92 billion yuan.
Challenges in the AI Landscape
Despite strong financial results, Baidu faces intense competition in China’s expanding AI sector. Hangzhou-based DeepSeek recently introduced AI algorithms that rival or surpass Western counterparts. Other major players like Tencent and Alibaba have seen substantial stock gains, whereas Baidu has not benefited as much from the sector’s growth.
Competition extends across all areas of Baidu’s business. DeepSeek’s success in developing advanced, cost-efficient open-source AI models challenges Baidu’s traditional approach. In response, Baidu announced plans to open-source its own AI models, a move seen as a strategic shift. The company has also integrated DeepSeek’s R1 algorithm into its chatbot, following Tencent’s lead, adds NIXSolutions.
Future Prospects and Industry Position
While Baidu was the first Chinese tech giant to unveil its AI algorithms, its position in the AI race is being tested. The company introduced the ChatGPT-like AI bot Ernie, initially charging an $8 monthly fee before making it free and issuing refunds. Despite these shifts, Baidu remains a key AI player and is now collaborating with Apple to bring Apple Intelligence to iPhone users in China.
We’ll keep you updated on further developments as Baidu navigates the evolving AI landscape.