Baidu Shares Surge on Expectations for ChatGPT Rival Ernie

Baidu Shares Surge on Expectations for ChatGPT Rival Ernie

Beijing, November 21, 2023- Baidu, China’s leading search engine company, experienced a significant surge in revenue during the June quarter, Baidu said on November 21. 1

While some analysts said the increase was caused by China’s ChatGPT rival Ernie, a Bloomberg news report suggested the surge was driven by a recovery in advertising and consumer spending following the relaxation of Beijing’s grip on the private sector.2

The company’s shares witnessed a pre-market surge of approximately 4% in New York, reflecting investor optimism surrounding Baidu’s strong financial performance and AI aspirations.

Baidu reported a substantial 15% increase in sales to 34.1 billion yuan ($4.7 billion) for the June quarter, exceeding analyst expectations. Net income also witnessed a remarkable 43% growth, reaching 5.2 billion yuan.

Baidu’s AI ambitions are attracting significant attention, particularly following the company’s unveiling of Ernie, its ChatGPT rival, in March.

This action strengthened Baidu’s position as a leader in domestic AI, triggering competition among major Chinese tech companies to create their own extensive language models.

“Baidu reported solid third-quarter financial results, demonstrating resilience in a challenging economic climate,” said Robin Li, Co-founder and CEO of Baidu. 1

“I am particularly pleased with our continuous technological enhancements and product improvements against the backdrop of emerging opportunities in generative AI and foundation models. Notably, we launched ERNIE 4.0, our most powerful foundation model. We have also harnessed the power of ERNIE and ERNIE Bot to reinvent our consumer-facing and enterprise-facing products, as well as our own operations, providing AI-native experiences and driving efficiency gains. Meanwhile, we’ve fully opened the ERNIE API to cloud enterprises, empowering them to develop their own AI-native applications and solutions. Our AI-centric business and product strategy should set the stage for sustained multi-year revenue and profit expansion within our ERNIE and ERNIE Bot ecosystems.” 1

Sources
  1. Baidu: https://ir.baidu.com/news-releases/news-release-details/baidu-announces-third-quarter-2023-results[↩][↩][↩]
  2. Bloomberg: https://www.bloomberg.com/news/articles/2023-11-21/baidu-s-revenue-beats-as-chatgpt-style-ai-starts-monetization[↩]
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