Baidu of China surpasses quarterly sales projections

China’s largest search engine company, Baidu, reported quarterly revenue that was slightly higher than market expectations, helped by strong growth in its cloud business.

Like many Chinese technology companies, Baidu has invested heavily in artificial intelligence (AI). This has helped the company attract more enterprise customers who are using AI tools to improve operations and productivity.

While Baidu’s main advertising business continues to face challenges due to a highly competitive market, its growing cloud division has helped balance the slowdown.

China’s economy has been affected by weak consumer demand and a long-running property sector crisis, which has reduced advertising spending. Since advertising is Baidu’s main source of revenue, this has impacted the company’s overall growth.

However, revenue from Baidu’s core AI-powered business — which includes cloud infrastructure, AI applications, and its robotaxi unit — rose strongly in the fourth quarter. It reached 11 billion yuan (about $1.61 billion) and made up 43% of the company’s main business revenue.

For the quarter ending in December, Baidu reported total revenue of 32.74 billion yuan. This was slightly higher than analysts’ average estimate of 32.62 billion yuan, according to data compiled by London Stock Exchange Group (LSEG).