Baidu Beats on Q1 Revenue as AI Cloud Offsets Weakness in Ads

Baidu (NASDAQ:BIDU) reported stronger-than-expected first-quarter revenue, driven by surging growth in its AI cloud business, which helped counterbalance softness in its core advertising operations amid a sluggish Chinese economy.

Revenue from Baidu’s core segments rose 7% year-over-year to 25.5 billion yuan ($3.53 billion), topping analyst estimates of 23.17 billion yuan. A standout was the AI Cloud division, where sales jumped 42%, highlighting growing enterprise demand for Baidu’s full-stack AI solutions and competitive pricing.

The cloud unit's accelerating momentum comes as AI increasingly becomes a central pillar of Baidu’s strategy. The company has continued to invest in its Ernie AI platform—China’s answer to ChatGPT—despite rising competition, including lower-cost offerings from challengers like DeepSeek.

Baidu also noted upgrades to its Qianfan mobility services platform, enhancing its capabilities for training and fine-tuning reasoning models, and released a new version of its PaddlePaddle deep learning framework in April.

While marketing revenues remained under pressure, the strong performance in AI cloud underscores Baidu’s ongoing pivot toward high-growth, innovation-led areas of the business.