TLDR:
- Baidu Inc. faced a 48% decline in profit due to AI development expenses.
- Revenue increased by 6% through enhanced advertising sales.
Baidu Inc., one of the largest Chinese technology companies, saw a significant decline in profit due to expenses related to developing artificial intelligence (AI) systems. Despite missing projections, the company managed to increase revenue by 6% with the help of enhanced advertising sales. Baidu’s collaboration with Microsoft and Google in generative AI development is expected to bring in additional revenue through advertising and cloud services. The founder, Robin Li, remains confident in the company’s AI endeavors despite the challenges faced.
Details:
Baidu Inc. reported a 48% decline in profit in the last quarter of 2023, which was worse than anticipated. The company’s expenses in training and developing AI systems to stay competitive in the AI field contributed to this decline. However, revenue increased by 6% due to a boost in advertising sales from Baidu’s ChatGPT-style service.
Baidu has partnered with Microsoft and Google to explore generative AI monetization strategies. The company’s AI model Ernie is expected to bring in additional revenue through advertising and cloud services in 2024. Despite facing macroeconomic and market uncertainties, Baidu’s pivotal cloud arm saw an 11% growth in revenue.
While Baidu’s research and development costs surged by 11% in the last quarter, the founder Robin Li expressed confidence in the company’s resources to continue its AI endeavors. Baidu’s ChatGPT-style service has gained over 100 million users, giving the company an edge over competitors like Tencent Holdings Ltd. and ByteDance Ltd.
