Baidu's Profit Slides Again Amid Slow AI Payoff — Update

By Tracy Qu

Baidu recorded another sharp profit drop and a fourth straight quarter of revenue declines as China's dominant search-engine operator continues to try to reinvent itself as an AI company.

The Beijing-based company, once called "China's Google," has been investing heavily in artificial intelligence, self-driving cars and chip development as its traditional advertising business slumps.

The pivot is slowly translating through to earnings as the company--at one time considered on par with China's top technology titans--looks to catch up in the AI race.

Baidu's net profit continued to decline in the first quarter, falling 55% from a year earlier to 3.45 billion yuan, equivalent to $506.6 million. Revenue slipped 1.1% to 32.08 billion yuan in the three months ended March.

Both net profit and revenue came in slightly ahead of analysts' estimates.

Its core AI-related business powered higher, generating nearly 50% revenue growth--a result that could underpin hopes of Baidu's AI ventures offsetting weakness in other parts of the company.

Revenue from the company's AI-related business exceeded half of its general business revenue for the first time during the quarter, which co-founder and Chief Executive Robin Li said was "a clear signal that AI has become the core driver of Baidu."

The company's AI cloud infrastructure segment posted revenue growth of 79%. Revenue from graphics-processing unit cloud services soared more than 180%. Apollo Go, its autonomous ride-hailing service, made 3.2 million driverless operational rides during the quarter.

Investors' sentiment toward Baidu has picked up in recent months, after souring in the first quarter in part due to a major setback in its Apollo Go robotaxi business and broader risk-off sentiment. General enthusiasm about AI and progress toward the listing of its chip unit, Kunlunxin Technology, have sent the company's shares in Hong Kong about 27% higher so far this quarter, while its American depositary receipts have gained more than 20%.

Baidu's chief financial officer, He Haijian, said Monday that operating cash flow remained positive in the first quarter, reflecting the continued improvement in the company's operating efficiency and overall business health.

Nasdaq-listed Baidu was 3.5% higher in premarket trading.

Write to Tracy Qu at tracy.qu@wsj.com

(END) Dow Jones Newswires

May 18, 2026 07:15 ET (11:15 GMT)