Baidu's Profit, Revenue Continue to Fall as It Pivots to AI

By Tracy Qu

Baidu's financial performance continued to deteriorate in the second quarter as the Chinese internet titan works to remake itself into an artificial-intelligence company.

The Beijing-based company, once considered China's answer to Google, has been pouring money into AI, autonomous driving and chip design even as its bread-and-butter advertising business has continued to shrink. These investments have been slow to show results: Its net profit has more than halved for the third consecutive quarter, while revenue has declined for more than a year.

On Tuesday, Baidu reported a 68% drop in second-quarter net profit to 2.32 billion yuan, equivalent to $344.2 million. Revenue came in at 31.325 billion yuan, down 4.2% from a year earlier.

Analysts had expected net profit of 2.82 billion yuan on revenue of 31.34 billion yuan, according to a FactSet consensus estimate.

The mixed results come as Baidu's Hong Kong-listed shares have shed more than a fifth of their value so far this year, underperforming the broader market as the company's legacy business continues to drag its outlook. Investors, meanwhile, are keeping a close eye on the listing progress of its chip unit, Kunlunxin, expected in Hong Kong within this year.

Baidu is pinning its hopes on its core AI-powered business, which the company said continued to account for half of general business revenue.

"Going forward, we remain firmly committed to investing in AI as the core driver of Baidu's long-term growth," Chief Financial Officer Haijian He said.

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

(END) Dow Jones Newswires

August 18, 2026 05:45 ET (09:45 GMT)