Baidu’s Profit Halves After AI Spending Erodes Bottom Line

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Once the runaway leader in desktop search, Baidu has over the years tried to adapt its business to the mobile era, albeit with mixed success

(Bloomberg) — Baidu Inc.’s profit plunged a worse-than-anticipated 48% in the last quarter, underscoring the growing costs of training and developing AI to fend off challengers in the burgeoning arena.

The company reported a December-quarter net income of 2.6 billion yuan ($361 million) that missed projections, though this was mainly due to a loss from equity accounting for preferred shares. It overshadowed a 6% rise in revenue after Baidu’s ChatGPT-style service began to augment advertising sales, helping the Chinese AI leader weather a severe economic downturn. Its shares slid 2% in New York.