Baidu’s AI Model Usage Surges, Driving Cloud Growth and Search Evolution
BEIJING, Aug. 22, 2024– Baidu, China’s leading search engine and AI company, has reported a significant surge in the usage of its large language model (LLM), Wenxin, with daily calls exceeding 600 million and daily token processing reaching 1 trillion. This represents a tenfold increase from the 50 million daily callsreported in Q4 2023, demonstrating the rapid adoption of Baidu’s AI technology.
The company’s founder, chairman, and CEO, Robin Li, revealed these figures during the company’s Q2 2024 earnings call. He also highlighted the growing role of AI in Baidu’s core search business, stating that 18% of search results are now generated by AI, up from 11% in Q1.
The number of daily calls to Wenxin has grown dramatically, demonstrating the increasing demand for our AI capabilities, said Li. We are seeing this translate into real-world impact, with AI playing a more significant role in our search results and driving growth in our cloud business.
Baidu’s AI efforts arealso driving growth in its cloud division. The company reported that its intelligent cloud business achieved sustained profitability under non-GAAP accounting, with revenue reaching 5.1 billion yuan (approximately $700 million) in Q2, a 14% year-over-year increase. AI contributed 9% tointelligent cloud revenue, up from 6.9% in the previous quarter.
The company’s focus on AI is evident in its recent launches, including the more powerful Wenxin 4.0 Turbo LLM and various promotional strategies. Baidu’s AI capabilities are also integrated into its search engine, whereAI-powered intelligent agents are used to understand user intent and provide personalized responses.
The shift towards AI-powered search is a significant development in the industry, said a search industry expert. As generative AI becomes more accurate in providing direct answers to user queries, it will inevitably impact the traditional advertising modelof search businesses.
Beyond search, Baidu’s AI capabilities are also driving growth in its autonomous driving business. The company reported 899,000 autonomous driving orders in Q2, a 26% year-over-year increase. As of July 28, 2024, Baidu’s autonomous driving service has provided over 7 million rides across China, and the company has begun large-scale, fully driverless road testing of its latest RT6 vehicles.
Baidu’s mobile ecosystem also continues to grow, with its Baidu app reaching 703 millionmonthly active users in June 2024, a 4% year-over-year increase. Managed page revenue accounted for 51% of Baidu’s core online marketing revenue in Q2.
Despite the positive developments in AI and cloud, Baidu’s overall revenue remained relatively flat in Q2,reaching 33.9 billion yuan (approximately $4.6 billion), compared to the same period last year. Net income attributable to Baidu reached 5.5 billion yuan (approximately $750 million), a 5% year-over-year increase. However, non-GAAP net incomeattributable to Baidu declined by 8% year-over-year to 7.4 billion yuan (approximately $1 billion).
Baidu attributed the flat revenue growth to continued macroeconomic headwinds affecting its online marketing business. The company also acknowledged that its focus on search innovation may have a short-term impact onmonetization.
Despite these challenges, Baidu remains committed to its AI strategy, believing that it will drive future growth and innovation. The company’s significant investments in AI, coupled with its strong position in China’s search market, position it well to capitalize on the growing demand for AI solutions.
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