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Baidu is setting the pace in the AI scene for other tech giants in China.
Chinese internet giant Baidu Inc (HKG: 9888) has seen a major uptick in its share price today following the release of better-than-expected revenue. Baidu impressed its investors as one of the top tech giants that saw a major uptick in profitability following the reopening of the Chinese economy after year-long Covid-19 restrictions.
According to the data shared by the company, it said it recorded a 31.1 billion yuan ($4.5 billion) revenue for the three months ended in March. While this revenue is impressive when compared to the projection from analysts which was pegged at 30 billion yuan. According to the company, the accrued revenue from Baidu Core, its business unit that features search-based ad sales, cloud offerings and its autonomous driving initiatives, grew 8% to 23 billion yuan.
As analysts from Barclays noted before the release of the Baidu results, it was revealed that the company’s “advertising business saw a nice rebound in demand especially post Chinese New Year, and the recovery might have accelerated as we are heading into 2Q”.
The analysts claimed that they “remain optimistic on China’s economic recovery and on the advertising industry outlook for 2023”. The company’s performance metrics are also well pronounced as net income came in at 5.8 billion yuan. This growth was recorded, thanks in part to the gains it printed on its investments.
Baidu is not just a major tech company in the country, it was also one of those that got severely impacted by the broader regulatory crackdown meted out on tech companies by the government. The bet from investors that tech stocks will rebound appears to be paying off with Baidu stocks used as a litmus test.
For its performance, the stock jumped 2.81% in Hong Kong and its price is pegged at 124.30 Hong Kong Dollars.
Baidu Revenue and the Diversity Push
Despite the role of Baidu as primarily an internet and marketing company, it is notably not limiting its innovation to this niche. In fact, Baidu saw an uptick in its revenue because of its diversity and the firm comes off as the first major internet giant in China to showcase its response to ChatGPT, the chatbot from OpenAI that has gained immense popularity since last year.
Dubbed the Ernie Bot, Baidu’s goal for the new AI tool is that it will be ubiquitous and can be integrated into as many systems as possible. Some of the marked outfits include speakers, self-driving, and smart speakers among others.
“We can buy computing power but not the ability to innovate,” Baidu’s billionaire founder Robin Li said in an internal speech recently, adding that “It’s just the beginning of this arena for tech competition.”
With its possibility, Baidu is setting the pace in the AI scene for other tech giants in China to trail.