Baidu, China’s leading search engine and AI company, reported 1% revenue growth in the first quarter of 2024, in line with expectations. The company’s revenue reached 31.5 billion yuan (US$4.3 billion), up from 31.1 billion yuan the previous year. Non-online marketing revenue increased by 6% due to Baidu’s AI Cloud business.
During the period, Baidu’s net income fell by 6% to 5.4 billion yuan, beating analysts' estimates. Baidu’s CEO, Robin Li Yanhong, expressed optimism about the future of generative AI, stating that models like Ernie will play a crucial role in various aspects of people’s lives. Baidu aims to make its Ernie models more affordable and efficient, which could lead to even greater opportunities for the company.
Baidu has invested heavily in generative AI and sees it as a potential growth engine. Ernie Bot, Baidu’s answer to OpenAI’s ChatGPT, has attracted over 200 million users in just 13 months. The latest version of the Ernie large language model (LLM) is on par with OpenAI’s most advanced model, GPT-4.
To monetize its AI products, Baidu has introduced three tools based on Ernie that allow developers to build applications, AI agents, and models without coding knowledge. Baidu also launched a paid version of Ernie 4.0, further capitalizing on the popularity of its AI offerings.
However, Baidu faces intense competition in the AI space from other Chinese players. While services like ChatGPT are not officially available in China, Chinese firms and institutions have developed over 200 LLMs. ByteDance, the owner of TikTok, recently launched a batch of LLMs at a lower cost than its rivals, potentially sparking a price war. Tencent Holdings, a major gaming and social media company, has also added text-to-image capabilities to its open-source LLM.
Despite competition, Baidu remains focused on advancing its generative AI initiatives and capturing the growing market. The company’s commitment to affordability and efficiency sets it apart, and Baidu is poised to take advantage of the opportunities presented by the evolving AI landscape.
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