BRIEF: AI Cloud boosts Baidu as CEO says new ERNIE expected to launch early next year

Baidu Inc. (BIDU.US; 9888.HK) last Thursday reported its revenue was roughly flat in the third quarter at 33.6 billion yuan ($4.64 billion), ahead of market expectations, as slowness in its legacy online search business was mostly offset by double-digit growth for its cloud-based AI services. The company also reported its profit for the period rose 39% quarter-on-quarter to 7.63 billion yuan ($1.07 billion).

Baidu is one of China’s leading developers of artificial intelligence (AI), positioning the technology as its next big growth engine behind its legacy search business. Two of its biggest AI initiatives are its ERNIE large language model (LLM), which offers generative AI to both consumers and business customers, and its Apollo Go autonomous driving program.

A new version of ERNIE is expected to launch early next year, providing better performance, accuracy and broader support for diverse user needs, Baidu CEO Robin Li said on the company’s earnings call. Baidu said its AI Cloud revenue rose 11% year-on-year to 4.9 billion yuan during the quarter and continued to be profitable on a non-GAAP basis.

On the autonomous driving front, Baidu said its operation achieved 100% fully autonomous driving in the megacity of Chongqing in October, following Wuhan. It added that its sixth-generation autonomous vehicle, the RT6, is now operating on public roads in multiple cities across China.

In a recent research report, Goldman Sachs said Baidu is “in full process of AI transformation,” adding that AI adoption for its cloud business is accelerating with an estimated growth rate of 15%. It forecast continued strength for 2025 as the company continues to enhance its LLM capabilities with increasing client penetration.

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