Baidu AI hits half of core sales as ads drop 19%
Baidu finally printed the mix it has been selling for two years. The same quarter shows the old search-ad engine shrinking faster than the new one can replace it.
Baidu said AI-powered businesses made up half of general-business revenue in the second quarter — 12.5 billion yuan, up 25 percent — for the second straight period, even as total revenue slipped 4 percent to 31.3 billion yuan ($4.62 billion) and missed estimates. Online marketing, still the larger cash engine, fell 19 percent to 13.1 billion yuan. The AI headline is a bundle: cloud infrastructure rose 50 percent to 7.3 billion yuan, and GPU cloud inside that jumped 283 percent, accelerating from 184 percent in the first quarter. AI applications grew 3 percent to 2.5 billion yuan. AI marketing services were flat at 2.6 billion yuan. Net income was 2.3 billion yuan, or 5.74 yuan per diluted ADS. CEO Robin Li said the mix reaffirms a shift "from an internet-centric company to an AI-first company."
The take is in the mix, not the milestone. Half of general business is now labeled AI, but the only line growing like an AI company is GPU cloud; apps are barely up and "AI marketing" is stuck. Baidu is also selling the picks and shovels — Kunlun chips, it said, now run Chinese models including Kimi K3, GLM 5.2, MiniMax M3, and Hunyuan 3 — which is a more honest business than pretending ERNIE still sets the pace. A 283.1 billion yuan cash pile and 3.4 billion yuan of operating cash flow buy time. They do not buy a replacement for a 13.1 billion yuan ad book that is still larger than the cloud line. We covered the office-assistant push last week — Baidu rebrands GenFlow as Kuku AI, ships standalone office client — and this print is the corporate version of the same bet: relabel the company around AI before the search business finishes shrinking.
Meta ran ads for Kromix, an App Store tool that invited users to generate pornographic deepfakes of real people, including a video that closely resembled a prominent female US politician. Wired and the Tech Transparency Project found 32 ads from a zero-follower page created on August 3, aimed only at men, many hidden behind beach and mountain thumbnails. Meta took them down after the inquiry; most had fewer than ten impressions. Apple pulled Kromix from the App Store and said the developer appeared to have added prohibited features after review. Meta already bans nudify ads and says it removed more than 340,000 of them late last year. A brand-new page still got a politician deepfake through automated review. The policy binder is thick. The filter is not.
What to watch: whether Baidu's GPU-cloud growth holds in the second half — management said it might accelerate — and whether Meta's next "new AI detector" catches the clone of Kromix before a reporter does.
If AI is half the company but ads still pay the bills, is Baidu transforming or just renaming the decline? Tell us in the comments.
Sources: Baidu IR · Yahoo Finance · Nation Press · AIBase · Leiphone · Wired · Techmeme
