Baidu reports modest revenue growth amid signs search engine giant's big tilt to AI is starting to pay off
China search engine and artificial intelligence (AI) giant Baidu reported modest revenue growth in the three months to end-December as the Beijing-based company's big investments in AI begin to pay off.
Baidu posted revenue of 35 billion yuan (US$4.9 billion) for the quarter, up 6 per cent year on year and in line with consensus analysts' estimates, according to a filing published on Wednesday. For all of 2023, revenue grew 9 per cent to 134.6 billion yuan.
Robin Li Yanhong, co-founder, CEO and chairman of Baidu, noted that Ernie Bot - the Chinese firm's answer to ChatGPT - achieved "breakthroughs in monetisation" in 2023.
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"Throughout 2023, we made significant strides to advance Ernie Bot, reinventing our products and services, and achieving with monetisation," said Li in the statement, adding that Baidu's commitment to generative AI would pave the way for new growth engines.
"In the fourth quarter, we maintained our focus on enhancing operational efficiencies," said Rong Luo, Baidu's chief financial officer. "As we look ahead to 2024, our goal is to persistently enhance operational efficiencies and achieve high-quality growth."
However, net income under global accounting standards came in at 2.6 billion yuan for the quarter, down 48 per cent from the same period a year earlier, and below the average 4.8 billion yuan forecast of analysts surveyed by Bloomberg, partly reflecting the company's heavy AI investments.
Revenue from Baidu's generative AI services and related businesses reached 656 million yuan during the fourth quarter, about 7.8 per cent of total cloud service revenue of 8.6 billion yuan, Shen Dou, head of Baidu AI Cloud, said on an earnings call late on Wednesday. Li said on the call that this revenue stream could grow into several billion yuan in 2024.
Li added that as of December, about 26,000 enterprises were actively using Ernie Bot through an application programming interface on a monthly basis, up 150 per cent over the previous quarter. Ernie Bot currently handles more than 50 million queries every day, up 190 per cent from the previous quarter, Li said on the call.
Baidu unveiled an updated version of its ChatGPT-like Ernie Bot during its annual technology conference in October 2023. Li said at the time that Ernie 4.0's abilities could stand up to comparison with GPT-4. Baidu launched a paid version of Ernie 4.0 in November, charging 59.9 yuan per month.
Revenue from its long-format video streaming platform iQiyi was 7.7 billion yuan, up 2 per cent year on year. iQiyi's monthly average revenue per membership for the quarter was 16 yuan, up from 15.5 yuan in the previous quarter.
Baidu's shares closed down 1.75 per cent at HK$106.6 on Wednesday in Hong Kong, ahead of the earnings release.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
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