Baidu Sales Slide Most Since 2022 in Fierce Chinese AI Contest

Baidu's quarterly revenue fell its most in about three years, hurt by an economic downturn that is capping its ability to fight bigger rivals in artificial intelligence and make inroads in newer areas.

- BLOOMBERG

BEIJING -

The Ernie chatbot creator's sales in the June quarter fell 4 per cent to 32.7 billion yuan (S$5.9 billion), weighed down by a slowdown in its core internet search operations.

Net income rose 33 per cent, versus projections for a decline, helped by a boost from long-term investments.

China's internet search leader is betting big on generative AI to drive future growth, but it faces mounting pressure from open-sourced models like DeepSeek and a wave of AI-native apps encroaching on its turf.

The company will continue to invest in AI even as margins and revenue come under pressure in the near term, chief financial officer Henry He said, as its mainstay search business loses ground to social video platforms like Xiaohongshu and TikTok's Chinese twin Douyin.

Online advertising revenue declined 15 per cent.