On February 18, Baidu, a Chinese search engine company, announced its shift towards an open-source model inspired by its AI endeavors. The CEO, Robin Li, mentioned during a call following the fourth-quarter 2024 results that the decision to make the upcoming generative AI chatbot source code for Ernie 4.5 series publicly available was influenced by the success of DeepSeek. Despite being an early adopter with the ChatGPT-style chatbot in 2023, Baidu's Ernie 4.0 faced challenges in gaining broad acceptance due to strong competition, especially from DeepSeek's latest models like R1.
Consequently, Baidu decided to open-source its next-generation models starting in June and introduce premium chatbot services in April. CEO Robin Li emphasized the benefits of open-sourcing for adoption based on DeepSeek's success. He expressed confidence in the Ernie 4.5 series, aiming to facilitate users and customers in experiencing the advancements more conveniently.
In the fourth quarter, Baidu reported a 2% decrease in quarterly revenue to 34.12 billion yuan ($4.7 billion), driven by a decline in the advertising sector but offset by gains in cloud AI. Baidu's Cloud AI division expanded by 26% to 7.1 billion yuan in the quarter, with significant contributions from AI technology. By December, the Ernie platform managed 1.65 billion daily user queries and interactions, representing a notable increase from 600 million in August.
Conversely, Baidu's online marketing business, excluding iQIYI streaming service, experienced a 7% drop to 17.9 billion yuan, reflecting a sluggish Chinese economy affected by a prolonged property market downturn leading to reduced advertising spending by small businesses.
Baidu's U.S.-listed shares saw a 7% decline in early trading.