Baidu unveiled a pair of glasses with a built-in AI assistant on November 12, 2024, providing a Chinese rival to the Meta Ray-Bans that have proven a rare success in AI-powered hardware.
Bloomberg | Bloomberg | Getty Images
BEIJING – Chinese technology giant Baidu on Thursday reported a 3% annual decline in third-quarter revenue, but nonetheless exceeded market expectations amid AI cloud growth.
Revenue came in at $4.78 billion for the quarter ended September 30. Net profit for the period rose 14% to $1.09 billion.
Baidu posted a 12% increase in its non-online marketing revenue to the equivalent of $1.1 billion, mainly driven by its artificial intelligence cloud business.
The company’s U.S.-traded shares fell nearly 4% in premarket trading after the results were released.
Here’s what analysts expected the company to report this quarter, according to LSEG estimates:
- Gain: $4.63 billion
- Net income: $857.17 million
Baidu reported revenue of 34.45 billion yuan ($4.75 billion) and net profit of 6.68 billion yuan for the company. third quarter of 2023.
Beijing-based Baidu operates one of the largest web browser search engines in China, along with a widely used maps app. The company also sells cloud computing services. Online marketing generates a significant portion of the company’s revenue.
Growth in its AI cloud business offset “persistent weakness” in Baidu’s online marketing stream, CEO Robin Li said in the earnings release, also commenting on the performance of the company’s Ernie generative AI model and chatbot.
“Our strong AI capabilities are increasingly recognized in the market, as evidenced by the increasing adoption of Ernie,” he said.
Baidu has been promoting its Ernie chatbot as a local alternative to OpenAI’s ChatGPT, which is not available in China. The Ernie bot now has 430 million users and programs access the underlying AI model about 1.5 billion times a day, more than double the figure of 600 million in August, Baidu said last week.
“Despite the short-term pressures, we remain steadfast in our AI-focused strategy and are confident in our long-term trajectory,” Li said on Thursday. “As we continue to scale AI, we are encouraged to explore how it can drive innovations and create value for consumers, businesses and society as a whole.”
The company also announced this this month Xiaodu AI glasses will start sales in the first half of next year. The wearable has at least one camera and uses Ernie’s AI capabilities and Baidu’s maps and search functions. Although Baidu has not announced a price, the product is widely expected to be a Chinese alternative to the popular Meta Smart glasses from Ray-Ban.
Baidu announced a management rotation last month, with Junjie He, previously head of the mobile ecosystem group, joining and became the company’s interim Chief Financial Officerwhile former CFO Rong Luo took charge of the mobile division.
“AI Cloud continued to demonstrate healthy and sustainable development in the third quarter,” he said in the earnings release. “Meanwhile, Apollo Go continued to make operational progress, supporting our confidence in the validity of the fully autonomous ride-hailing business model.”
Apollo Go, which operates Baidu’s robotaxi business, reported a 20% year-over-year increase in rides in the third quarter. The average number of trips per month rose to 329,333 in the third quarter, compared to 287,500 in the first half of the year, according to CNBC calculations.