Baidu declared on Thursday that artificial intelligence would undoubtedly contribute to increased sales and profitability in the future.
China’s Baidu reported first-quarter revenue growth of just 1%, indicating that advertisers were cautious due to the lackluster Chinese economic development. However, Baidu stated on Thursday that it was sure artificial intelligence would help boost future sales and profitability.
The business claims that the fourth iteration of its huge language model, Ernie, which is similar to GPT and has undergone multiple changes since its unveiling in March of last year, can compete with OpenAI’s GPT-4.
In a call with investors, co-founder and CEO Robin Li stated, “We remain confident that AI will help us sustain growth in revenue and profit in the long run, even though we operate our legacy business in a challenging environment and expect slower revenue growth in the near term.”
The company, which is the biggest search engine provider in China, still makes most of its money from online ad sales, which are being negatively impacted by the slowing expansion of the Chinese economy.
Based on LSEG statistics, it reported sales of 31.51 billion yuan ($4.37 billion) on Thursday, which was higher than the average projection of 31.21 billion yuan made by analysts for the three months ending March 31.
“The weak micro-economy contributes to the softness of our ad business,” Li stated. The bulk of our advertisers are SME (small and medium-sized firms); however, they represent a wide range of industries. This indicates that the microenvironment has a significant impact on our advertising revenue.”
When the U.S. market opened, Baidu’s shares, which are listed there, were down 4.8%.
During the results call on Thursday, Li claimed daily usage of Ernie by cloud clients has reached 200 million, up from 50 million in the last quarter of 2023.
The cloud business’s stated overall revenue increased by 12% to 4.7 billion yuan, with 6.9% coming from AI-related revenue. The business reported last month that since its previous upgrade in December, its AI chatbot, Ernie Bot, has amassed over 200 million users.
In addition to attempting to leverage AI to improve its cloud computing and online search capabilities, Baidu began charging users 59.9 yuan a month in November.
For the quarter, the company’s internet marketing sales climbed by 3% to 17 billion yuan.
Baidu is expanding its autonomous driving division as part of its diversification efforts away from online search in addition to AI. This Monday, Baidu revealed the sixth generation of its robotaxi service would be available in Wuhan. CEO Li restated the company’s goal of turning a profit on its driverless car division by the end of next year.
LSEG data shows that the company’s adjusted net income for the quarter was 7 billion yuan, exceeding analysts’ average expectation of 557 billion yuan.
Also read: Unveiling the Ethical Imperatives: Navigating the Intersection of AI and Cybersecurity
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