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, reports Caixin.
The company reported a December-quarter net income of RMB 2.6 billion ($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.
Baidu’s results follow disappointing numbers from Alibaba Group Holding, underscoring how the private sector that once drove the world’s second largest economy has run out of steam. The mixed performance underscored the challenges facing a company that once routinely chalked up double-digit percentage growth but is now grappling with macro and market uncertainties.