Baidu, China’s dominant search engine operator, has reported that U.S. export controls on advanced semiconductors will not significantly impact its AI development, thanks to access to domestic alternatives. The company’s first-quarter revenue exceeded analyst expectations, rising 3% to 32.45 billion yuan ($4.50 billion), driven primarily by growing demand for its AI cloud services.
In a conference call with analysts, Baidu Vice President Shen Dou stated, “Domestically developed chips and increasingly efficient homegrown software will form a strong foundation for long-term innovation in China’s AI ecosystem.” This stance echoes comments from rival Tencent Holdings, whose executives previously mentioned that existing stockpiles of AI chips would shield the company from U.S. export controls.
The U.S. export restrictions, which took effect last month, effectively blocked sales of Nvidia’s H20 chips designed for the Chinese market. Despite these restrictions, Baidu’s non-online marketing revenue reached 9.4 billion yuan, up 40% year-over-year, primarily driven by its AI cloud business. In contrast, revenue from Baidu’s online marketing business fell 6% to 17.31 billion yuan.
Baidu has been intensifying its focus on AI in recent years to reduce its dependence on advertising revenue from its core search engine business. The company was among the first in China to launch a chatbot following Microsoft-backed OpenAI’s release of ChatGPT in late 2022. Despite facing fierce competition from other Chinese firms, Baidu has continued to innovate in the AI space, introducing new models and upgrading its existing offerings.
The company’s CEO, Robin Li, recently highlighted Baidu’s AI capabilities, stating that its cluster of 30,000 self-developed P800 Kunlun chips can support the training of advanced AI models like those developed by DeepSeek. Baidu’s U.S.-listed shares were down 0.3% in morning trading following the report.
