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Baidu Profit Plunges on Ad Slump as AI Revenue Jumps

Management is pairing an AI-first pivot with shareholder payouts to steady sentiment after a weak quarter.

A sign of Baidu is pictured at the company's headquarters in Beijing, China March 16, 2023. REUTERS/Tingshu Wang/File Photo

Overview

  • Fourth-quarter revenue fell 4% year over year to 32.74 billion yuan, marking a third straight quarterly decline.
  • Net profit dropped 66% to 1.78 billion yuan, coming in below analyst expectations.
  • AI-powered businesses generated about 11.3 billion yuan in the quarter, up 48% and equal to 43% of general business revenue.
  • Baidu’s board approved up to $5 billion in share repurchases, and the company expects to pay its first dividend by the end of 2026.
  • Apollo Go logged 3.4 million driverless rides in Q4 and started overseas pilots, while Baidu’s ADRs fell after the results and year-end cash and investments stood near 294.1 billion yuan.