Baidu Revenue Misses as Advertising Weakness Offsets AI Growth

Chinese technology company Baidu reported weaker-than-expected revenue as a decline in its advertising business outweighed strong growth in its artificial intelligence and cloud operations.

Baidu’s second-quarter revenue fell 4% year-on-year to 31.33 billion yuan  ($4.64 billion), missing analysts’ expectations. Online marketing revenue dropped significantly as weaker consumer demand and a slowdown in China’s property sector reduced advertising spending. The online marketing services segment reported total revenue of 13.1 billion yuan ($1.94 billion) in the quarter ended June, down 19% from a year ago.

Meanwhile, Baidu’s AI-related businesses continued to grow. Revenue from its AI-powered operations increased 25% to 12.5 billion yuan ($1.85 billion), supported by rising demand for cloud computing and AI infrastructure.

The results show Baidu’s ongoing transition from a traditional advertising-driven business toward AI and cloud services. While AI is becoming an important source of growth, it has not yet fully offset the decline in the company’s core advertising business.