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Investing.com - Baidu (NASDAQ:BIDU) has reported better-than-anticipated revenue in the first quarter, as the Chinese search giant noted strength at its artificial intelligence cloud division.
Revenue from the firm’s core businesses rose by 7% versus a year ago to 25.5 billion yuan, compared with estimates of 23.17 billion yuan. Baidu cited "accelerating momentum" at its AI cloud division, where sales surged by 42% and helped offset a decline in revenues at its marketing operations, which have been grappling with a recently tepid Chinese economy.
"The strong performance of our AI Cloud business underscores the growing market recognition of our distinctive strength in providing full-stack AI products and solutions with a highly competitive price-performance advantage," said CEO Robin Li in a statement.
AI has become a key pillar of Baidu’s business. The company was one of the first in China to launch a ChatGPT-style chatbot in 2023, although its Ernie offering has faced intense competition, particularly since the emergence of a low-cost model from start-up DeepSeek earlier this year.
Baidu said it had upgraded its mobility services platform Qianfan with expanded tools to support the "training and fine-tuning" of reasoning models. It also released an updated version of its PaddlePaddle deep learning framework in April.
In the quarter ended on March 31, group-wide revenue expanded by 3% to 32.45 billion yuan. Bloomberg consensus estimates had seen the figure at 31.03 billion yuan.
Adjusted earnings before interest, tax, depreciation and amortization increased by 4% to 7.21 billion yuan, also topping projections.
U.S.-listed shares in Baidu rose by more than 2% in premarket U.S. trading on Wednesday.