To The Moon

Mr Henry He HaiFeng proved to be instrumental to $BIDU$ transformation. He initiated the huge impairment despite obvious criticism paving the way for healthier growth pathway in the public AI Infrastructure cloud business which grew 33% yoy in Q3'25.

With Chinese gov continuous investment for a sovereign AI Infrastructure leveraging private sector advancement, it guarantees growth & revenue source for $BIDU$ AI cloud infra business. Going forward, it wouldn't be an uncertainty in this business.

$BIDU$ currently is the leading AI tech provider for AI application, digital employee, digital human (Livestream), & agentic AI service provider by revenue. Management cited higher willingness to pay for AI products that improves productivity eg. Digital human (livestreaming) & agentic AI services (growth +2++% yoy with a RMB 2.8B rev). Imo, this shows that management has found the right target market that allows it to monetize it's AI investment on top of public AI infra revenue.

With AI application business including Baidu Wenku, Drive etc, serving as future growth driver once public is familiar with AI usage. $BIDU$ is probably the most comprehensive AI application service provider out there. Current AI adoption poised to accelerate, rev growth is likely to be higher than historically proven. Within, the next two years, $BIDU$'s non-online marketing revenue (driven by AI) would likely take over the current ad-fueled business as the largest revenue contributor. 

With caveat, AI is inherently competitive. Other players are starting to adopts similar business model & aiming similar market. One of them, $Kuaishou$ leveraging their discipline topping text-video & image-video video model Kling AI, they started to provide similar AI services to various targeted customers eg. Film producers & digital human for livestreaming.

Understanding $BIDU$  history, they're more likely to excel as  behind the scene tech service provider rather than consumer facing service provider. E-commerce platform would be much more receptive to utilize their digital human services rather than one of their competitors developed tech (which is currently the case).

The only question left is how much margin could be made from these newly found business. Other businesses would inevitably come down to providing similar AI services albeit from a "catching up" position. Would $BIDU$ be able to keep leading in their area of focus?