Post Thumbnail

Baidu loses ground in Chinese AI sector

Chinese tech giant Baidu Inc. (BIDU, 9888.HK) reported a decline in revenue in the fourth quarter amid increasing competition in the artificial intelligence and internet search sectors. This opens a new chapter in the development of China’s trillion-dollar technology industry.

The company’s financial results exceeded conservative analyst forecasts: revenue decreased by 2% to 34.1 billion yuan ($4.7 billion) against a forecast of 33.4 billion yuan. Net profit reached 5.2 billion yuan, significantly exceeding the expected 3.92 billion yuan. Baidu’s reporting attracted increased investor attention after Hangzhou startup DeepSeek presented AI models that match and in some parameters surpass Western counterparts. This achievement triggered a rise in Chinese technology company stocks, including Tencent Holdings Ltd. (TCEHY, 0700.HK) and Alibaba Group Holding Ltd. (BABA, 9988.HK), however, Baidu largely remained aside from this rally.

The company faced a complex set of challenges in key business areas. In the search segment, Baidu is losing audience and advertising budgets to social applications such as Xiaohongshu and ByteDance Ltd.’s Douyin. The situation is complicated by the general economic downturn in China.

DeepSeek’s breakthrough, achieved through the use of open-source models and ultra-low training costs, has called into question Baidu’s long-standing strategy of developing proprietary technologies. In response to changing market dynamics, the company unexpectedly announced the open-sourcing of its models and integrated DeepSeek’s latest R1 model into its flagship chatbot, following Tencent’s example.

Despite being the first among Chinese technology leaders to introduce large language models to the general public and commercialize the ChatGPT-like Ernie service with an $8 monthly subscription, the company appears to be losing its leadership in AI. Currently, Baidu is forced to refund users after transitioning the application to a free distribution model.

Autor: AIvengo
For 5 years I have been working with machine learning and artificial intelligence. And this field never ceases to amaze, inspire and interest me.
Latest News
UBTech will send Walker S2 robots to serve on China's border for $37 million

Chinese company UBTech won a contract for $37 million. And will send humanoid robots Walker S2 to serve on China's border with Vietnam. South China Morning Post reports that the robots will interact with tourists and staff, perform logistics operations, inspect cargo and patrol the area. And characteristically — they can independently change their battery.

Anthropic accidentally revealed an internal document about Claude's "soul"

Anthropic accidentally revealed the "soul" of artificial intelligence to a user. And this is not a metaphor. This is a quite specific internal document.

Jensen Huang ordered Nvidia employees to use AI everywhere

Jensen Huang announced total mobilization under the banner of artificial intelligence inside Nvidia. And this is no longer a recommendation. This is a requirement.

AI chatbots generate content that exacerbates eating disorders

A joint study by Stanford University and the Center for Democracy and Technology showed a disturbing picture. Chatbots with artificial intelligence pose a serious risk to people with eating disorders. Scientists warn that neural networks hand out harmful advice about diets. They suggest ways to hide the disorder and generate "inspiring weight loss content" that worsens the problem.

OpenAGI released the Lux model that overtakes Google and OpenAI

Startup OpenAGI released the Lux model for computer control and claims this is a breakthrough. According to benchmarks, the model overtakes analogues from Google, OpenAI and Anthropic by a whole generation. Moreover, it works faster. About 1 second per step instead of 3 seconds for competitors. And 10 times cheaper in cost per processing 1 token.