BEIJING, Chinese search giant Baidu reported a 7% drop in third-quarter revenue as weak advertising demand outweighed strong growth in its cloud and AI business.
The company posted 31.17 billion yuan ($4.38 billion) in revenue, slightly above analyst expectations of 30.7 billion yuan, according to LSEG data.
Baidu continues to struggle against sluggish economic conditions in China, where a troubled property market and ongoing U.S.–China trade tensions are pressuring consumer spending. These headwinds have pushed advertisers and businesses to cut back on tech and marketing budgets, directly affecting Baidu’s core revenue stream.
Advertising Takes a Hit
Revenue from Baidu’s online advertising business fell 18% year-on-year to 15.3 billion yuan, reinforcing how vulnerable the company remains to shifts in ad spending. Baidu’s search platform still relies heavily on marketing and commercial placements.
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Cloud and AI Shine
In contrast, Baidu’s non-marketing revenue, which includes its cloud operations, jumped 21% to 9.3 billion yuan. Demand for Baidu’s AI tools, large language models, and enterprise AI agents continues to rise as companies look to leverage automation and generative AI to boost growth.
While cloud and AI remain bright spots, the downturn in advertising continues to weigh on overall performance.
Exchange Rate: $1 = 7.1119 Chinese yuan renminbi.
