Baidu Q2 revenue fell 4% to ¥32.7b, dragged by a 15% drop in advertising; net income rose 33% to ¥7.3b on investment gains
Cloud and AI services grew 34%, led by demand for Baidu’s Ernie LLM, though it faces pressure from open-source and rival platforms
Baidu is scaling autonomous driving, with Apollo Go rides more than doubling to 2.2m in Q2; overseas robotaxi expansion planned
Streaming arm iQiyi revenue fell 11%, exploring a $300m Hong Kong listing
Baidu Leans on AI & Robotaxis as Ad Slump Knocks Revenue, Profit Jumps on Investments
Baidu’s June-quarter revenue slipped 4% to ¥32.7B as search ads declined, while net income rose 33% to ¥7.3B on investment gains. The company is betting on AI and robotaxis to offset ad weakness
Baidu Leans on AI & Robotaxis as Ad Slump Knocks Revenue, Profit Jumps on Investments
Summary
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Baidu reported a 4% decline in June-quarter revenue to ¥32.7 billion as an advertising slowdown weighed on its core search business, but net income rose about 33% to ¥7.3 billion, helped by gains from long-term investments, Bloomberg reported.
The results underscore a company in transition, battling waning ad demand while doubling down on generative-AI products and autonomous driving as new growth engines.
Revenue came in at ¥32.7 billion in Q2, down 4% year-on-year. Online advertising fell about 15%, the principal drag on top-line growth. Non-marketing revenue grew 34%, driven largely by cloud demand. Net income rose to ¥7.3 billion, beating expectations thanks to investment returns.
Baidu is pushing its Ernie large-language model as the linchpin of a “cloud-to-app” AI ecosystem, hoping AI monetisation will offset search declines.
But Ernie has lost some ground to competing open-source models and app-first rivals (notably ByteDance and Tencent), forcing Baidu to abandon a paid subscription approach and open-source aspects of Ernie to retain developer and enterprise adoption.
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Autonomous Driving
Autonomous driving is a growing commercial focus: Apollo Go rides more than doubled in the quarter to 2.2 million, and cumulative rides exceeded 14 million as of August. Baidu plans to expand its robotaxi service overseas (Singapore, Malaysia and trials in Hong Kong) to broaden revenue sources beyond China’s crowded online-ad market.
Baidu’s streaming arm iQiyi posted an 11% revenue decline, underscoring pressure in content businesses and prompting iQiyi to seek fresh capital, reports say it may target a roughly $300 million Hong Kong listing.
Baidu faces fiercer competition on multiple fronts: deep-pocket rivals Alibaba and Tencent, nimble AI upstarts and social-video platforms that are eroding search advertising share. The company’s ability to translate AI and cloud gains into durable revenue, and to scale profitable EV-like services such as robotaxis, will be critical to sustaining investor confidence.
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What to watch next
Key items to monitor include traction and monetisation of Ernie such as enterprise deals and API revenues; cloud revenue growth and margin trends as AI workloads expand; Apollo Go’s international rollout timetable and unit economics; and iQiyi’s fundraising progress and content-monetisation roadmap.
Baidu’s headline decline in ad sales highlights the limits of a search-centric model in a shifting Chinese internet landscape; the firm is placing its bets on AI and autonomous mobility to drive the next chapter of growth.
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