Baidu reported Q1 2025 revenue of 32.45 billion yuan, up 3% year-on-year and beating estimates, with net income of 7.72 billion yuan. The company is leveraging its Ernie AI model to drive cloud growth and diversify beyond advertising, while facing competition from new AI-native browsers and social apps. Baidu is also expanding its autonomous driving robotaxi service domestically and into global markets.
Baidu Inc., China’s leading internet search company, reported a 3% increase in revenue for the first quarter of 2025, reaching 32.45 billion yuan, surpassing analyst expectations of 31.03 billion yuan. Net income for the quarter stood at 7.72 billion yuan, highlighting the company’s resilience amid economic challenges and growing competition in artificial intelligence.
The revenue growth marks a positive shift for Baidu as it pushes to monetize its AI capabilities, especially through its proprietary Ernie AI model. This shift aims to diversify beyond its traditional advertising business, which faces pressure due to slowing domestic consumption and uncertainties linked to international trade policies.
Baidu’s cloud division, powered by generative AI, has experienced strong double-digit sales growth, helping to offset some of the challenges in the advertising sector. The company continues to invest in developing AI-native applications to maintain a competitive edge against rivals such as DeepSeek, Alibaba, and Tencent. To stay relevant, Baidu open-sourced its AI models and discontinued the paid subscription for its Ernie chatbot, following the rise of popular AI apps from competitors like ByteDance and Tencent.
In addition to AI, Baidu is making significant strides in autonomous driving. The company operates a fleet of self-driving robotaxis in major Chinese cities including Beijing, Guangzhou, and Wuhan, and is expanding this service internationally to markets in the Middle East and Europe.
Despite the company’s efforts, Baidu faces challenges in its core search business as users increasingly migrate to social-video platforms such as Xiaohongshu and Douyin (TikTok’s Chinese counterpart). Additionally, competition in AI-powered web browsers is intensifying, with Alibaba and Tencent integrating AI assistants to attract users.
Overall, Baidu’s strong quarterly performance reflects its strategic focus on AI and cloud computing, as well as its expansion into autonomous driving, positioning the company for future growth despite ongoing market pressures.
