more than ever, it must be the Chinese Google

For more than two decades, Baidu did very well with a very clear strategy: to be “the Chinese Google.” He was born alone a year after Google and, while the American company ate up the world market, Baidu did the same in its giant domestic market. However, just as Google no longer cares By being just a search engine, Baidu has had to adapt to a market in which giants like TikTok have eaten its toast. AI is that wave that Baidu needed and with their latest financial results they have realized something important.

Now yes they have to be like Google. Desperately, too.

Green shoots of AI. Last Monday, the Beijing-based company presented first quarter results. It is something that we are seeing in all listed companies and it is interesting not to see the amount of money they move but to try to intuit how the business is going and where it can go depending on what they present. For example, with SMIC (the large foundry in China) we see that things are going well due to the component crisis and the need for chips for AI, and with Baidu this boost in artificial intelligence is also being noticed.

According to the results, revenue driven by Baidu Core AI (the company’s AI arm) rose 49% year-on-year. It is a real outrage that is also reflected in the robotics branch such as Apollo Go and its ‘robotaxis’, whose activity increased by 120% year-on-year. The most interesting thing about this growth in the AI ​​segment is that this branch is now responsible for 52% of Baidu’s total business. And this is good… and bad at the same time.

BUT. These good results for the AI ​​segment come at a delicate time for the company. Baidu is realizing that search advertising revenue is no longer sufficient due to a traditional business that is running out of steam. Because, overall, the company has seen a 2% decrease in its total revenue.

They have eaten the market. The reason is that the company has been falling behind. It’s curious, but Baidu was one of the first in the world to launch its own chatbot. Ernie He was born in March 2023 and in September he was already available to all audiences. It was a strange approach (a closed and paid chatbot) while the industry trend was beginning to be different (free use and open source licenses), but it was not the only thing.

Baidu as a search engine also did not have the monopoly it once enjoyed. At an alarming rate (for them), its relevance as a search engine was fading because young Chinese were no longer using traditional search engines. In fact, they didn’t know how to use it well and They went to other apps as TikTok or Instagram to find what they were looking for.

Transformation. This painted a not very encouraging picture for a Baidu that seemed like a dinosaur immobile before the meteorite not only of AI, but of new applications that, as we say, were eating its toast on its own ground. There were two options: continue as before, and things were not going well, or find a remedy.

In the middle of last year, and after 2025 in which Chinese language models appeared even under the stones With a rock-bottom price and plenty of power for day-to-day consultations, Baidu presented Ernie X1.1, its new IAG model that was still closed, but seemed compete head to head against the main rivals. It also has another open source model and it is evident that they have seen the wolf’s ears.

Monetize AI. Because these quarterly results show that things have changed, that there is fierce competition in China and that Baidu has to play its cards to remain relevant. He doesn’t have a TikTok or a WeChatbut it has something fundamental: infrastructure. And, precisely, there is support to monetize artificial intelligence not through software, but through hardware.

At a global level we are seeing that, due to the component crisis and what it costs to set up a data centerthere are companies that rent their GPUs and AI platforms for others to use in the cloud. These companies are raising the price of their rents (a lot) and have reported that Baidu is doing precisely that. The company is increasing the price of its cloud computing services for AI by between 5% and 30% and the cloud file storage service by up to 30%.

This increase is attributed, in part, to the company’s investment in infrastructure, something that also puts pressure on margins. Because, again, the competitors were running over it and the Chinese Google has the technical and server muscle to do the same transformation as Google itself in the era of AI and savage capitalism: putting its infrastructure at the service of those who need it and cannot pay for their own equipment. In short, less search engine and more AI infrastructure

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