Baidu AI Business Overtakes Legacy Search as Net Profit Plunges 55%

Baidu reported first-quarter 2026 results on May 18, revealing a strategic inflection point as its AI-powered operations overtook the legacy search and advertising business. Core AI revenue surged 49% year-over-year to 13.6 billion yuan, now accounting for 52% of general business revenue, while online advertising revenue fell 29% to 12.6 billion yuan from 16 billion yuan a year earlier, battered by weak consumer spending and China's property sector crisis.

Total revenue slipped 1.1% to 32.1 billion yuan, marking a fourth consecutive quarter of revenue declines. Net profit fell 55% to 3.45 billion yuan from 7.72 billion yuan, dragged down by foreign exchange losses and higher costs. Despite the declines, both revenue and profit exceeded analyst estimates. Excluding one-time items, profit per American Depositary Share was 12.06 yuan, beating expectations of 11.57 yuan.

CEO Robin Lisewski identified AI as the company's primary growth driver, while CFO Haijian He highlighted operating efficiency gains. Within the AI segment, GPU cloud services grew 184% and AI cloud infrastructure rose 79%. Baidu is expanding its Kunlunxin AI chip line and Qianfan model-as-a-service platform.

The Apollo Go robotaxi unit reported triple-digit growth in fully driverless rides, reaching 22 million cumulative rides and expanding to 27 cities globally. Operations are running in Dubai and the United Arab Emirates, with expansion into South Korea. Testing is underway in London, Switzerland, broader Europe, and Hong Kong.