Baidu’s Sales Slide Most Since 2022 in Fierce Chinese AI Contest

(Bloomberg) – Baidu Inc.’s three -month income fell in the highest number in about three years, and in the AI, he hurts the economic decline that limits his ability to fight larger competitors and depart in new areas.

In the June quarter of Ernie Chatbot creator decreased by 4% to 32.7 billion Yuan ($ 4.6 billion) and a slowdown in basic internet search operations. Net revenue increased by 33%against the decline in which an increase in long -term investments helped. The company’s US shares fell by 2% in pre -US trade.

China’s internet search leader is betting on productive AI to ensure future growth, but faced with open-source models such as Deepseek and a wave of Ai-local applications circulating on the grass. Finance Manager Henry said that the company will continue to invest in artificial intelligence, even if it is under the pressure of margins and income in the near term.

The main basis Search Business, Xiaohongshu and Tiktok’un Chinese twin Dogin, such as the social-video platforms lost the ground. Online advertising revenue decreased by 15%. However, the out -of -marketing income grew with a better 34%than expected with the help of demand for the cloud unit.

“Since artificial intelligence making money is still in very early stages and is not yet scaling, our income and margins are expected to be particularly challenging in the third quarter in the short term,” he said. “We see the potential to improve margin because our basic advertising business is the healing and stability of our business.”

Baidu immersed the results income decrease: Street shows gold

Baidu rely on Ernie to support an AI ecosystem and increase the demand for the cloud section with a double -digit cloud in the last quarter.

In addition, Uber Technologies Inc. and LYFT INC. through partnerships, in June quarter with driverless driving, 14 million in August 14 million, cumulative driving, Apollo GO Robotaxi service accelerates a thrust abroad.

Baidu is planning to take the self -lasting robotaxi fleet in Beijing, Guangzhou and Wuhan to Singapore and Malaysia earlier this year. The company is now experimenting in Hong Kong.

However, in China’s increasingly crowded AI Arena, Baidu, his rivals Alibaba Group Holding Ltd. and Tercent Holdings Ltd. – With much more firepower and larger global footprints – and Nimble upstarts faces. Baidu’s stock price was around 6% this year and both larger internet leaders.

“We are not yet on the scene of a large -scale money -making scene,” the founding joint Robin Li said in a call to analysts. “As our AI transformation is progressing rapidly, there is still an important area for optimization in the early stages before reaching its full potential.”

Ernie from Baidu was one of the first chat boots released in the world’s largest internet arena, but ByTedance Ltd. And he lost from Tencent to applications and Alibaba’s open -source models such as Qwen.

What does Bloomberg say?

Baidu’s demand for AI Cloud Services, which increased modestly 2Q Core -up top line rhythm, came to 15% of search engine ads, despite the 16.2 billion Yuan, despite the Yuan, the corrected operating revenue fell by 41%. Edge cavities, 120 BPS gross margin missing predictions, fell by 780 BPS per year to 43.9%, because the income mixture has changed towards lower margin cloud services.

– Robert Lea and Jasmine Lyu, Senior Analyst

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The company had to abandon the paid subscription model and to open up the registered Ernie models open.

Baidu’s Netflix -style subsidiary IQiyi Inc. reported a 11% income decrease. Bloomberg News reported that the Embattled Streaming platform is trying to collect $ 300 million for a list in Hong Kong this year.

-Help from Savov.

(Updates with CEO’s shares that are quoted from the second paragraph.)

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