Baidu, which operates China's biggest search engine and is an artificial intelligence (AI) pioneer, beat revenue estimates for the first quarter in the company's first earnings report since it launched its alternative to ChatGPT in March.
The Beijing-based company reported revenue of 31.1 billion yuan (US$4.5 billion) for the first quarter, a 10 per cent year-on-year increase and beating analysts' estimates. Net income hit 5.8 billion yuan for the period, compared with a loss of 885 million yuan in the first quarter of 2022, according to results released on Tuesday.
Although the company still relies on advertising for the bulk of its revenue, Baidu has made it clear that its future lies with AI.
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"We believe the emergence of generative AI and large language models (LLMs) present transformative potential for AI in various industries, to help people and organisations to achieve more and have a positive impact on society," said Robin Li Yanhong, co-founder and CEO of Baidu.
In an evening conference call with analysts, Li said the advent of generative AI "can be compared to the introduction of the internet", providing tremendous opportunities.
Baidu has started to offer its Ernie Bot competitor to ChatGPT to a variety of clients in industries such as financial services, software, as well as education, said Li, adding that he expects the company's online market revenue to outperform growth in China's GDP.
Baidu's shares rose 2.8 per cent to close at HK$124 ahead of the earnings release in Hong Kong on Tuesday.
As ChatGPT - developed by Microsoft-backed OpenAI - is not available for users in mainland China, Baidu has a good shot at taking a lead in the Chinese market for AI-powered chat bots.
Ernie Bot has received some good feedback for its Chinese language capabilities from netizens and won a first group of clients. During the Ernie Bot launch event in Beijing, Baidu founder Li said that while the new AI product is not perfect, the company is not waiting "because there is market demand".
Baidu's peers, including Alibaba Group Holding and Tencent Holdings, have also said they are developing technologies similar to ChatGPT. Alibaba, the owner of the South China Morning Post, launched its GPT model last month, opening access to selected corporate clients.
A number of start-ups have also released ChatGPT alternatives. Mobvoi Information Technology, an AI company headquartered in Beijing, launched its model last month. A Bloomberg news report said the company is preparing for a Hong Kong listing with an IPO taking place as soon as this year.
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