Baidu earnings report 2Q 2023

BEIJING — Chinese language tech firm Baidu on Tuesday reported better-than-expected income, up by 15% year-on-year within the second quarter and bolstered by development in promoting.

This was the quickest quarterly year-on-year development tempo in two years, in response to Refinitiv information.

Baidu’s U.S.-traded shares had been up by greater than 4% in pre-market buying and selling.

Here is how Baidu did within the June quarter versus Refinitiv consensus estimates:

• Income: 34.1 billion yuan ($4.7 billion) versus 33.28 billion yuan anticipated.

Earnings per American Depositary Share on a non-GAAP foundation had been 22.55 yuan, versus 15.79 yuan within the year-ago interval.

Inside Baidu’s core companies, on-line advertising and marketing income rose by 15% to 19.6 billion yuan within the second quarter, and non-online advertising and marketing income added 12% to six.8 billion yuan.

The corporate’s use of AI to higher match advertisements to Baidu search queries helped enhance the quarter’s on-line advertising and marketing gross sales development from a yr in the past, Robin Li, co-founder and CEO of Baidu, mentioned throughout an earnings name.

Baidu operates China’s main web search engine, in addition to generally used shopper apps for navigation and cloud doc storage.

“Within the second quarter of 2023, Baidu Core accelerated income and revenue development, pushed by the strong efficiency of on-line advertising and marketing enterprise and working leverage,” Li mentioned in a launch.

“Generative AI and enormous language fashions maintain immense transformative energy in quite a few industries, presenting a major market alternative for us,” he mentioned.

Baidu has been making progress with a Chinese language-language ChatGPT different referred to as Ernie bot, which is open to the general public and was launched in March. OpenAI’s wildly fashionable rival chatbot is not simply accessible within the nation.

Final week, Baidu introduced that 5 Ernie bot plugins — together with ones for rapidly changing textual content to video and for PDF search — would grow to be extra broadly accessible to customers. Three of the plugins can be used concurrently, in response to the corporate.

The corporate plans so as to add plugins from third-party builders, Li mentioned on the earnings name.

Baidu has to this point prioritized company companions for entry to its Ernie bot, which opened to wider use through a waitlist earlier this yr.

When it comes to authorities regulation, Li mentioned Baidu is “nonetheless ready for the inexperienced gentle for large-scale rollout of Ernie bot to be used in shopper going through apps.”

However he mentioned the most recent model of China’s AI guidelines, that took impact Aug. 15, are “extra pro-innovation than regulation.” That is in comparison with an earlier draft launched in April.

“We do not have an actual date for every part. However the pattern could be very promising and we’re fairly optimistic in regards to the future for a greater regulatory atmosphere,” Li mentioned.

Baidu final week additionally revealed an AI-powered assistant that would assist with duties together with reserving conferences, air tickets and inns. It was not instantly clear how customers may acquire the assistant product.

The corporate can also be seeking to broaden the attain of AI into the auto sector. This month, the corporate introduced a strategic settlement with state-owned Changan Car to develop autonomous driving capabilities primarily based on the AI mannequin behind Baidu’s Ernie bot.

Baidu shouldn’t be alone in its foray, as different Chinese language tech giants are additionally pushing into AI-related merchandise. Earlier this month, e-commerce big Alibaba claimed that “robust demand” for coaching synthetic intelligence fashions on the cloud and the associated enterprise alternative was simply starting.

Web titan Tencent mentioned throughout its earnings launch final week that it plans to launch its personal AI mannequin later this yr, to be used in merchandise equivalent to gaming and promoting.

Baidu additionally operates self-driving taxis below the Apollo Go model in China. Within the second quarter, Baidu mentioned it ran roughly 714,000 robotaxi rides, up from 660,000 within the first quarter.

The corporate was allowed to begin charging fares for public robotaxi rides in Beijing in November 2021. Passengers can e-book the rides, that are usually extremely backed, through an app.

Many of the robotaxis, which can be found in components of many main Chinese language cities, nonetheless have human workers inside.

In June, the corporate mentioned it acquired approval to function robotaxis with out staff in a suburb of Shenzhen. That adopted related approval in August 2022 to take away human workers in some robotaxis in components of Wuhan and Chongqing.