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Friday's Bonus Story 3 Reasons Baidu Could Be the Dark Horse of Global AIWritten by Nathan Reiff. Published 11/25/2025. 
Key Points - Chinese internet giant Baidu has made successful inroads into AI, with its AI-based businesses experiencing significant revenue growth.
- The company has worked to transform its legacy search business with AI tools and offerings—so far, non-online market revenue has offset a slowdown in the core search area.
- Baidu's Apollo Go autonomous ride-hailing service is also expanding rapidly, including with new international offerings.
Although not a household name in the United States, internet giant Baidu Inc. (NASDAQ: BIDU) is massively popular in China, where its legacy search business accounts for the majority of internet searches in the country. U.S. investors unfamiliar with developments in Baidu's fast-growing AI and cloud business should take the time to learn more about the firm. To be sure, Baidu's sizable net loss in the latest quarter might deter some investors, although its massive cash stockpile of approximately 296.4 billion yuan ($41.6 billion) may help ease concerns. With 17 of 24 Wall Street analysts rating BIDU a Buy, and the potential for roughly 22% additional upside on top of this year's 44% rally, Baidu is quickly becoming the AI stock to watch. Below are three reasons it merits a look for investors focused on the AI race. Baidu's AI Momentum Is Dominant Street Ideas highlights early activity in small-cap names before they show up on mainstream radars. Stay ahead of the noise with alerts focused on real momentum, not hype. Get Early Access — Join Free Baidu's AI offerings—including cloud-based tools, AI-native monetization products in the company's mobile business, and a variety of agents and digital-human products—have posted rapid revenue growth. In the latest quarter, AI-based businesses in Baidu's lineup saw revenue rise roughly 50% year-over-year (YOY) to 10 billion yuan (approximately $1.4 billion). While many AI companies in the United States have sought to convert promising technology into real-world revenue, Baidu appears to have unlocked a practical path. The company's mobility-as-a-service (MaaS) product, Qianfan, is now agent-centric and continues to grow. Baidu's AI infrastructure and platform services under the AI Cloud Infra banner saw 33% YOY revenue gains and a 128% increase in subscription revenue from AI accelerator infrastructure. Baidu's AI products have so far shown stickiness in subscriber growth, and investors might expect the company to continue delivering revenue from these tools as it expands its offerings. Baidu's transformation of its legacy search business into an AI-ready, revenue-generating core is ongoing, but the early results are promising—despite an overall revenue slowdown and losses in the segment. Transformation of Legacy Search Business Is Ongoing and Successful Baidu, often called the "Chinese Google," built its reputation on internet search but has seen its core business slow in recent months. It's often compared to Alphabet (NASDAQ: GOOGL), Google's parent company. The legacy search business contracted, with overall revenue of 24.7 billion yuan (about $3.5 billion) for the last quarter, down 7% YOY. A slowdown in online marketing was the main driver: Baidu's Core segment recorded an operating loss of 15.0 billion yuan ($2.1 billion), resulting in a negative operating margin. Normally, a development like this in a company's primary business would be a significant red flag for many investors. However, Baidu's non-online-marketing revenue—particularly its AI cloud business—rose 21% YOY over the same period to 9.3 billion yuan ($1.3 billion). The company appears to be succeeding in pivoting from traditional ad sales to AI-based revenue through its search function. In October alone, for example, Baidu said about 70% of mobile search result pages contained AI-generated content, helping it reach 708 million monthly active users on its app. Autonomous Ride-Hailing Could Be the Growth Business of the Future Apollo Go is Baidu's autonomous ride-hailing service, which used AI to provide more than 3 million driverless taxi rides in the third quarter alone. YOY growth in this business was an astonishing 212%, and Apollo Go has now delivered over 17 million driverless rides across 22 cities. Driverless taxi services have yet to gain similar traction across much of the United States. Waymo, one of the largest domestic providers, has a smaller footprint than Apollo Go in part because of the significant regulatory hurdles the industry still faces. Meanwhile, Baidu is rapidly expanding Apollo Go internationally, positioning itself to become a major name both inside and outside China. The company specifically noted expansion efforts in Switzerland, the United Arab Emirates, and Hong Kong in the third quarter.
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