On November 12, 2024, Baidu, the giant tech company from China, revealed an innovative pair of glasses infused with AI technology. This new product is set to compete with the AI-powered Meta Ray-Bans that have already gained popularity in the AI hardware market.
In spite of a slight 3% decrease in their annual third-quarter revenue, Baidu managed to outperform market predictions, mainly due to the growth of their AI cloud sector. The reported revenue for this quarter was $4.78 billion, with the net income for this period increasing by an impressive 14% to $1.09 billion.
Baidu’s non-online marketing revenue saw a significant increase of 12%, amounting to $1.1 billion. This growth was mainly spurred by the success of their AI cloud business. However, following the release of these results, Baidu’s shares in the U.S. market saw a drop of almost 4% during premarket trading.
Analysts had expected the company to report a revenue of $4.63 billion and a net income of $857.17 million for the quarter. In comparison, Baidu’s reported revenue for the third quarter of 2023 was 34.45 billion yuan ($4.75 billion) and a net income of 6.68 billion yuan.
Among other ventures, Baidu runs one of the leading web browser search engines and a widely used maps app in China. A substantial portion of the company’s revenue comes from its online marketing. Growth in Baidu’s AI cloud business managed to balance the “ongoing weakness” in its online marketing sector, stated CEO Robin Li in the earnings release.
Baidu’s Ernie chatbot, promoted as a local alternative to OpenAI’s ChatGPT, has garnered a user base of 430 million. The AI model underlying Ernie is accessed approximately 1.5 billion times per day, a significant increase from the 600 million rate reported in August.
Despite current pressures, Li stated that the company remains committed to its AI-focused strategy and is confident about its long-term growth trajectory. The company is set to start selling its Xiaodu AI Glasses in the first half of next year. These glasses are equipped with a camera and use Ernie’s AI capabilities along with Baidu’s map and search functions. Though the price has not been disclosed yet, the product is anticipated to compete with Meta’s popular Ray-Ban smart glasses in the Chinese market.
Last month, Baidu announced a management shift, with Junjie He taking over as the company’s interim Chief Financial Officer, while former CFO Rong Luo assumed leadership of the mobile division. Baidu’s robotaxi business, Apollo Go, reported a 20% year-on-year surge in rides during the third quarter, further bolstering confidence in their business model.
