On Feb. 18, Baidu released its fourth-quarter earnings report, showing a 2% year-over-year decline in overall revenue, totaling RMB 34.1 billion ($4.77 billion). According to the report, the drop comes amid challenges in online marketing revenue, which totaled RMB17.9 billion ($2.46 billion), decreasing 7% year over year. However, the company’s AI cloud business stood out, growing 26%. This growth underscores the increasing significance of AI-driven services as Baidu strategically shifts toward an open-source model with its ERNIE large language model. Baidu has stated that DeepSeek’s success has inspired the open source move.
Why it matters: DeepSeek’s launch in early 2025 is poised to revolutionize the AI landscape, offering high performance at a significantly lower cost. This evolution extends beyond simple price wars, paving the way for AI to move from specialized tools to widespread applications. Baidu has become one of the biggest beneficiaries of this transformation, as it provides AI services to over 60% of state-owned enterprises and numerous private firms, with key partnerships established with companies like Xiaomi and Zeekr.
Details:
- ERNIE handled about 1.65 billion API calls daily in Dec. 2024, with external API calls up 178% quarter-over-quarter, showing particularly strong momentum.
- Baidu Wenku, a one-stop platform for content access and creation, saw its monthly active users reach 94 million in Dec. 2024, a 216% increase year-over-year and an 83% increase quarter-over-quarter.
- In recent years, Baidu Wenku has introduced a range of AI features, including smart slides generation, AI-powered search, and intelligent audio picture books. These features rely on the computing power and data storage support provided by Baidu AI Cloud
Context: Baidu’s advancements in AI technology, particularly with the introduction ofDeepSeek, are part of a broader trend in the tech industry where large language models are becoming increasingly integral to business operations. As companies seek to leverage AI for enhanced productivity and efficiency, the demand for robust cloud services that can support these technologies has surged.
- On Feb. 14, Baidu announced that the ERNIE 4.5 model series will be released in the coming months, with an official open-source launch set for June 30. Just a day earlier, on Feb. 13, Baidu announced that ERNIE Bot will be free starting April 1.
- On Feb. 26, Baidu announced plans to fully integrate DeepSeek and Large Model ERNIE’s deep search capabilities to enhance user experience, and offer the service for free.
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