On Tuesday, Baidu Inc (NASDAQ: BIDU) shares rose 2% after as the Chinese tech giant reported solid third quarter results. While Open AI stayed without its key figures and Microsoft Corporation (NASDAQ: MSFT), with its 49% stake in the company, having to deal with the drama, Baidu continues to boldly carve its AI path.
Third Quarter Highlights
For the quarter ended on September 30th, revenue grew by 6% YoY to 4.45 billion yuan which amounts to about $4.72 billion. Revenue growth slowed down from second quarter's 15% YoY growth. Online marketing revenue at the search engine provider rose 5% YoY while non-online marketing revenue increased 6%. In the second quarter, these two revenue sources both grew by double digits.
Due to an increased marketing spend, Baidu's selling, general and administrative expenses rose 11% YoY to 5.8 billion yuan. Net income amounted to 6.68 billion yuan, rising from last year's comparable quarter when Baidu earned 5.21 billion yuan. Increased server fees that aimed to support Ernie bot research led to a 6% YoY rise in research and development expenses that rose to 6.1 billion.
The Evolving Dynamics Of The AI Landscape
While the AI landscape is experiencing seismic shifts with the unexpected departure of Sam Altman from the powerhouse, Microsoft-backed Open AI, competitors just got a valuable opportunity to pick up speed in this evolving landscape. Baidu already jumped in the AI race by unveiling Ernie 4.0, its latest AI chatbot that directly rivals that of Open AI that Microsoft embraced. In November, Baidu even started charging for a version of Ernie bot.
When Baidu CEO, Robin Li, demonstrated the chatbot's content generation, problem-solving, and creative endeavor capabilities, it showed it is not inferior in any aspect to Microsoft-backed GPT-4. By rapidly gathering more than 45 million users, OpenAI and Microsoft gained a fierce competitor. In response to US export curbs on chips, Baidu responded it has sufficient reserves of AI chips to continue improving the Ernie bot for up to two more years.
Baidu is facing fierce competition both in China and across the globe. Together with Alibaba (NYSE: BABA) and Tencent Holdings Limited (OTC: TCEHY), it makes the kingdom of the Chinese internet scene. Last week, Tencent also assured its investors its chip supplies somewhat protect the company from US export curbs that include the H800 AI chips that Nvidia Corporation (NASDAQ: NVDA) makes. The AI scene is shaped by a quickly-evolving dynamics.
Just look at Microsoft, on Friday, it found itself in a turmoil yet on Monday, it emerged as a winner by hiring ousted Sam Altman along with other key staff of OpenAI, preventing them from going to its AI rivals such as Google (NASDAQ: GOOG) (NASDAQ: GOOGL), and by turning a crisis into an opportunity, Microsoft further strengthened its AI leadership. But with its latest performance results, Baidu showed its determination to fight for the AI throne.
DISCLAIMER: This content is for informational purposes only. It is not intended as investing advice.