Baidu, Inc. (BIDU): Business Model Canvas [Dec-2025 Updated]

You're looking at a company in the middle of a massive shift, and honestly, the numbers from late 2025 tell the whole story of that pivot. After a decade watching these giants, I can tell you that seeing the core Online Marketing revenue drop 18% year-over-year while the AI Cloud segment jumps 21% is a clear signal of where the capital is flowing. With RMB 296.4 billion in the bank, the question isn't if they are going all-in on AI, but how this new structure-from the Ernie LLMs to the Apollo Go robotaxis-will actually translate into sustainable profit. Dig into the full Business Model Canvas below to see the nine building blocks of this AI-first strategy.

Baidu, Inc. (BIDU) - Canvas Business Model: Key Partnerships

You're looking at the critical alliances Baidu, Inc. has locked in to scale its AI and autonomous driving ambitions across late 2025. These partnerships aren't just handshake deals; they represent concrete deployments and financial commitments that shape the near-term outlook for Apollo Go and the AI Cloud segment.

Global Robotaxi Expansion with Uber Technologies Inc.

Baidu, Inc. and Uber Technologies Inc. forged a multi-year strategic partnership in July 2025 to deploy Apollo Go autonomous vehicles on the Uber platform in international markets, specifically excluding the U.S. and mainland China. The agreement involves deploying thousands of Baidu's Apollo Go autonomous vehicles. The initial wave of these deployments is scheduled to roll out in Asia and the Middle East by the end of 2025.

This global push builds on significant domestic scale. As of May 2025, Apollo Go operated a global fleet of over 1,000 fully driverless vehicles across 15 cities, including Dubai and Abu Dhabi. By that same month, the cumulative public rides provided by Apollo Go surpassed 11 million. The second quarter (Q2) of 2025 alone saw over 2.2 million fully driverless rides, marking a 148% year-over-year increase. By August 2025, cumulative rides exceeded 14 million.

Integration with CATL for Advanced EV Battery Technology

The strategic cooperation agreement signed with Contemporary Amperex Technology Co, Ltd (CATL) focuses on integrating CATL's battery technology, battery-swapping solutions, and skateboard chassis into the development of Baidu's unmanned vehicles. This is a marriage of AI prowess with physical energy storage leadership. CATL, the largest power battery maker, installed 339.3 GWh globally in 2024, securing a 37.9% worldwide market share. CATL holds a market share of over 30% in the global EV battery market overall.

Autonomous Car Rental Services with CAR Inc. in China

Baidu, Inc.'s Apollo unit and CAR Inc. officially launched the world's first autonomous driving rental service available to the general public in China in July 2025. The service runs on Baidu Apollo's L4-level autonomous driving platform and integrates with CAR Inc.'s national network. The initial fleet uses customized 'Apollo Go' vehicles designed to accommodate up to three passengers.

The economics of this deployment are telling. As of June 2025, the sixth-generation Apollo Go vehicle cost 204,600 yuan (approximately $28,150 USD), with operating costs only 1/7 of Waymo's and 30% lower than Tesla's. This service targets a car rental market analysts expect to surpass 300 billion RMB (about $41 billion USD) by 2030. Orders for Apollo Go saw a 75% year-over-year increase in the first quarter of 2025.

Here's a quick look at the scale metrics related to the underlying Apollo Go service:

Deployment with Dubai RTA to Exceed 1,000 Driverless Vehicles

Baidu, Inc. signed a strategic cooperation agreement with the Roads and Transport Authority (RTA) of Dubai in March 2025 to launch autonomous driving testing and services. The plan involves deploying 100 fully autonomous RT6 robotaxis in urban Dubai by the end of 2025. The long-term goal is to scale the fleet to no fewer than 1,000 vehicles over the next three years (by 2028). Experimental operation of 50 autonomous vehicles began in the months following the April 2025 MoU signing. This partnership supports Dubai's ambition for 25% of all city trips to be autonomous by 2030. Apollo Go commenced open-road testing in Dubai in August 2025.

Enterprise Clients for AI Cloud Solutions and Infrastructure

Baidu, Inc.'s AI Cloud business is seeing broadening enterprise adoption of its AI products and solutions. In the third quarter (Q3) of 2025, leading enterprise clients increased spending and expanded usage beyond just AI infrastructure. The AI Cloud segment is a major driver of Baidu Core's non-online marketing revenue.

The financial performance for the AI Cloud segment in Q3 2025 shows clear traction:

• AI Cloud revenue reached RMB 6.2 billion, up 21% year-over-year.
• Revenue from AI Cloud Infra (infrastructure and platform services) was RMB 4.2 billion, growing 33% year-over-year.
• Subscription-based revenue from AI accelerator infrastructure saw a 128% year-over-year increase.

Overall, Baidu's AI-powered businesses generated revenue of approximately RMB 10 billion in Q3 2025, representing over 50% year-over-year growth. Total company revenue for Q3 2025 was 31.2 billion yuan ($4.38 billion USD).

Finance: finalize the Q4 2025 AI Cloud revenue forecast by next Tuesday.

Baidu, Inc. (BIDU) - Canvas Business Model: Key Activities

You're looking at the core engine driving Baidu, Inc. right now, which is definitely shifting from its legacy search business to deep infrastructure bets. Here's the breakdown of what the company is actively doing, based on late 2025 figures.

Developing and iterating the Ernie (Wenxin Yiyan) foundation model

Baidu, Inc. is focused on advancing its large language models, positioning them as foundational for enterprise solutions. The latest iteration, ERNIE 5.0, is natively omni-modal, jointly modeling text, images, audio, and video from the ground up for comprehensive understanding and generation. This work supports the ERNIE Bot for public access and the Qianfan MaaS (Model-as-a-Service) platform for enterprises via Baidu AI Cloud. Earlier models showed aggressive pricing to gain traction; for instance, Ernie 4.5 had input pricing at $0.55 per million tokens and output at $2.20 per million tokens, while Ernie X1 was priced lower at $0.28 for input and $1.10 for output per million tokens. The company is also making its no-code application builder, Miaoda (version 2.0), available globally as MeDo via medo.dev, which has already generated over 400,000 applications. The company's AI-powered businesses overall grew over 50% year-over-year in Q3 2025.

Scaling AI Cloud infrastructure, including AI accelerator subscriptions

The AI Cloud unit is a major focus, showing healthy expansion even as the core business faces headwinds. In the third quarter of 2025, Baidu, Inc. reported revenue from AI Cloud Infra reached RMB 4.2 billion, marking a 33% year-over-year increase. The most significant growth driver here is the subscription-based revenue from AI accelerator infrastructure, which surged 128% year-over-year for the same period. The total revenue from all AI-related cloud infrastructure, applications, and marketing services reached roughly RMB 10 billion in Q3 2025.

Here's how the AI-native revenue streams broke down in Q3 2025:

Operating the Baidu Search Engine and Mobile Ecosystem

The legacy search engine still commands over 50% of the search market as of 2024, but its associated online marketing revenue is under pressure. For the third quarter of 2025, Baidu Core's online marketing revenue was RMB 15.3 billion, representing an 18% decrease year-over-year. This decline contributed to the overall Baidu Core revenue falling 7% year-over-year to RMB 24.7 billion. The company is reallocating resources, with reports indicating layoffs affecting legacy groups like the mobile ecosystem, with cuts up to 40% in some departments. Still, the non-online marketing revenue within Baidu Core, which includes cloud, grew 21% to RMB 9.3 billion in Q3 2025.

Expanding Apollo Go autonomous ride-hailing services globally

Baidu, Inc.'s Apollo Go service is scaling rapidly through driverless operations and international partnerships. In Q3 2025, Apollo Go delivered over 3.1 million fully driverless operational rides, a 212% increase from the prior year. The cumulative rides provided to the public surpassed 17 million globally as of the November 2025 Baidu World Conference, with weekly fully driverless orders exceeding 250,000. The fleet has logged over 240 million total autonomous kilometers, with more than 140 million in fully driverless mode. The service operates across 22 cities globally, including recent expansions into Switzerland via a partnership with PostBus, and initial deployments planned with Uber Technologies, Inc. and Lyft, Inc. in Asia, the Middle East, and Europe. The manufacturing cost for the sixth-generation autonomous vehicle, the RT6, is less than 30,000 USD.

Investing in proprietary AI chip design and hardware

To secure its AI infrastructure against supply constraints, Baidu, Inc. is heavily invested in its in-house chip designer, Kunlunxin. This activity is key to powering its ERNIE models and cloud services. Analysts project that Baidu's chip revenue could surge sixfold to RMB 8 billion (approximately $1.1 billion) by 2026, driven by strong domestic demand and limited access to foreign GPUs. Macquarie analysts value the Kunlun unit at about $28 billion, and the subsidiary is reportedly preparing for a potential $3 billion Hong Kong Initial Public Offering. Kunlunxin has already secured orders from major clients like China Mobile, and its five-year roadmap includes the M100 chip in 2026 and the M300 in 2027.

Finance: draft 13-week cash view by Friday.

Baidu, Inc. (BIDU) - Canvas Business Model: Key Resources

You're mapping out Baidu, Inc.'s core assets as of late 2025, and honestly, the numbers tell a clear story about where the capital and compute power are concentrated. These aren't just line items; they are the engines driving the next phase of growth, especially with the AI pivot.

The most tangible resource is the balance sheet strength. As of September 30, 2025, Baidu, Inc. held total cash and investments amounting to RMB 296.4 billion (which converted to about $41.64 billion USD). That's a serious war chest for continued R&D in a competitive environment.

The foundation of their AI offering is the proprietary model suite. The latest iteration, Ernie 5.0 Large Language Models (LLMs), was unveiled at Baidu World 2025 in November 2025. This model is massive, containing 2.4 trillion parameters, and it boasts multimodal understanding and generation across text, images, audio, and video inputs and outputs. While global beta access for developers via Baidu AI Cloud APIs is slated for Q1 2026, the model itself is a late-2025 resource.

The user base remains a critical distribution channel for these AI services. The Baidu App mobile user base is reported with 735 million MAUs in June 2025. This scale is what allows Baidu to monetize AI natively, as seen by AI-native marketing services revenue hitting RMB 2.8 billion in Q3 2025, a 262% year-over-year increase.

The physical and technological infrastructure supporting this AI push is substantial. Baidu, Inc. continues to invest heavily in its High-performance computing clusters and data centers, a necessity underlined by the fact that AI-powered businesses generated roughly RMB 10 billion in revenue in Q3 2025. Furthermore, the company is developing its own silicon, with the Kunlun M100 chip optimized for inference scheduled for early 2026, and the M300 for training/inference coming in early 2027.

The Apollo autonomous driving technology platform and fleet represent a significant, capital-intensive asset. Here are the operational metrics as of late 2025:

These resources are deployed across the business, which you can see reflected in the AI Cloud segment's performance. AI Cloud revenue reached RMB 6.2 billion in Q3 2025, a 21% increase year-over-year.

To summarize the key tangible and intangible assets:

• Financial Buffer: RMB 296.4 billion in total cash and investments as of Q3 2025.
• AI Model IP: Ernie 5.0 with 2.4 trillion parameters.
• User Scale: 735 million Baidu App MAUs (June 2025).
• Autonomous Fleet Scale: Operations spanning 22 cities globally.
• Infrastructure Investment: Development pipeline including Kunlun M100 chip for early 2026 deployment.

The AI Cloud infra revenue, which directly ties to compute resources, was up 33% year-over-year in Q3 2025, showing the utilization of those data centers is ramping up fast. Finance: draft 13-week cash view by Friday.

Baidu, Inc. (BIDU) - Canvas Business Model: Value Propositions

You're looking at the core value Baidu, Inc. (BIDU) is delivering to its customers as of late 2025. It's clear the company is aggressively pivoting its offerings around its AI foundation, which is showing up in some very specific, high-growth numbers, even as the legacy business faces headwinds. Here's the quick math on what they are offering right now.

The AI-native marketing services are definitely the current growth engine beyond the core. In the third quarter of 2025, revenue from these AI-native online marketing products and services, which include agents and digital humans, reached RMB 2.8 billion. That represents a robust year-over-year increase of 262%.

For enterprise customers, Baidu, Inc. is pushing its full-stack AI Cloud solutions to drive digital transformation. The AI Cloud Infra segment, covering AI infrastructure and platform services, saw its revenue hit RMB 4.2 billion in Q3 2025, marking a 33% increase year-over-year. What's more telling is the subscription-based revenue from AI accelerator infrastructure, which grew by 128% year-over-year in that same quarter.

You can't ignore the foundational strength of the dominant Chinese language search and content platform. As of July 2025, Baidu, Inc. held a market share of 56.23% across all search engine platforms in China. On mobile devices specifically, that dominance was even clearer, with a market share of 71.91% in July 2025.

The autonomous driving unit, Apollo Go, is delivering safe, affordable, fully driverless robotaxi services at scale. In Q3 2025 alone, Apollo Go provided over 3.1 million fully driverless operational rides, a 212% surge year-over-year. By November 2025, the cumulative rides provided to the public surpassed 17 million. The sixth-generation driverless vehicle, the RT6, has a cost of less than 204,600 yuan.

Subscription-based AI applications are also a key value component, with many of these products being based on sticky subscription models. In Q3 2025, revenue from these AI Applications reached RMB 2.6 billion, showing a 6% year-over-year increase. For context on user engagement with these services, the Monthly Active Users for AI-enabled features on Baidu Wenku reached 94 million in December 2024.

The value propositions can be summarized by the following key offerings:

• AI-native marketing services with 262% YoY revenue growth in Q3 2025.
• Full-stack AI Cloud solutions for enterprise digital transformation.
• Dominant Chinese language search platform with 56.23% market share (All Platforms, Jul 2025).
• Safe, affordable, fully driverless robotaxi services (Apollo Go).
• Subscription-based AI applications generating RMB 2.6 billion in Q3 2025.

Baidu, Inc. (BIDU) - Canvas Business Model: Customer Relationships

You're looking at how Baidu, Inc. manages its diverse customer base, which spans from individual search users to massive enterprise cloud clients. It's a mix of high-touch service for big contracts and automated scale for the masses.

Automated self-service for search advertisers and SMEs.

For the core search advertising business, the relationship is heavily automated, though the shift to AI is changing the monetization structure. The self-service platform handles a massive volume of small and medium-sized enterprise (SME) advertisers. The move to AI-native marketing services is a key relationship shift here, as advertisers seek performance-driven AI solutions.

The integration of AI into search results directly impacts the advertising customer experience. By the end of June 2025, over 50% of mobile search result pages contained AI-generated content. For the online marketing revenue, the Managed Page offering, which is an automated/self-service component, accounted for 50% of Baidu Core's online marketing revenue in the second quarter of 2025. This is up from 47% in the first quarter of 2025.

Dedicated enterprise sales and support for Baidu AI Cloud.

Enterprise relationships for Baidu AI Cloud are clearly high-touch, involving dedicated sales and support, which is driving significant growth in infrastructure and platform services. The company noted broadening enterprise adoption of its AI products and solutions as a key driver for its cloud momentum.

Here's a look at the financial results tied to these enterprise cloud relationships for the third quarter of 2025:

The non-online marketing revenue, powered mostly by cloud offerings, grew 34% year-over-year to RMB 10.0 billion in the second quarter of 2025.

Subscription models for AI-powered software products.

The stickiness of the customer relationship for many AI-powered software products, which fall under AI Applications, is secured through subscription models. This focus is on delivering high-quality, recurring revenue streams.

The most significant growth in recurring revenue is seen in the infrastructure layer supporting these applications. Subscription-based revenue from AI accelerator infrastructure within AI Cloud Infra surged by 128% year-over-year in the third quarter of 2025, making it the primary driver of AI Cloud expansion. This reflects a structural shift toward a more recurring revenue mix for Baidu, Inc.

Co-development and strategic engagement with large partners (e.g., Uber).

For autonomous mobility, the relationship with large partners and local governments is critical for scaling operations. This involves co-development and securing operational permits.

• Apollo Go, Baidu, Inc.'s autonomous ride-hailing service, provided 3.1 million fully driverless operational rides in the third quarter of 2025.
• Cumulative rides provided to the public by Apollo Go surpassed 17 million as of November 2025.
• As of October 2025, Apollo Go's global footprint covered 22 cities.
• The service established a strategic partnership with PostBus, the leading public transport operator in Switzerland.
• Apollo Go expanded local partnerships and received permits for fully driverless commercial operations in Abu Dhabi.

Community engagement for AI developers using open-source models.

Baidu, Inc. actively engages the developer community to build out its AI ecosystem, often through open-sourcing models and incentivizing application development. This builds a base of future enterprise and application customers.

Engagement metrics and incentives include:

• Baidu, Inc. offered RMB 70 million ($9.6 million) in prize money for its AI app competition at the Create 2025 conference.
• The open-sourcing of the ERNIE 4.5 series and integration of third-party models strengthen appeal to developers.
• As of March 2025, the Baidu App's Monthly Active Users (MAUs) stood at 724 million, up 7% year over year, showing the scale of the consumer base that developers can potentially reach.
• The Baidu App MAU reached 735 million in June 2025.
• As of November 2024, the Ernie Bot handled around 1.5 billion API calls per day.

Finance: draft 13-week cash view by Friday.

Baidu, Inc. (BIDU) - Canvas Business Model: Channels

Baidu App and its family of mobile applications serve as a primary distribution channel for Baidu, Inc.'s services.

• Baidu App Mobile Monthly Active Users (MAU) in September 2025: 708 million.
• Baidu App MAUs in March 2025: 724 million.
• Daily average time per user on the Baidu App increased 2.3% year-over-year in Q3 2025.
• Total users across the entire family of apps: Over 1.1 billion.
• Daily internet searches handled on average: Around 6 billion.

Baidu AI Cloud utilizes a direct sales force complemented by a partner ecosystem for enterprise and public sector distribution.

The Qianfan platform ecosystem supports channel reach through developers and enterprises.

• Mainstream AI models hosted on Qianfan: Over 100.
• AI agents enabled by Qianfan: 33,000.
• Developers attracted to Qianfan: 50,000.
• Enterprises using Qianfan: 10,000.
• Inference cost reduction (ERNIE 4.5 Turbo): 80%.

Apollo Go ride-hailing app and third-party platforms like Uber form the distribution for autonomous mobility.

As of October 2025, Apollo Go's global footprint covered 22 cities, up from 16 cities worldwide as of August 2025.

• Cumulative public rides as of November 2025: More than 17 million.
• Fully driverless operational rides in Q3 2025: 3.1 million.
• Fully driverless operational rides in Q3 2025 year-on-year growth: 212%.
• Fully driverless orders fulfilled weekly (as of Nov 2025): Over 250,000.
• Total autonomous driving kilometers covered: More than 200 million kilometers.
• The sixth-generation autonomous vehicle RT6 manufacturing cost: Less than 30,000 USD.
• Apollo Go achieved 10.14 million kilometers of operation before a single airbag deployment.

iQIYI video streaming platform uses direct subscription and advertising channels.

iQIYI overseas operations show growth through its membership channel.

• Overseas membership revenue annual growth: Exceeded 40%.
• iQIYI Q3 2025 Total Revenue (USD): $938.7 million.
• iQIYI Q3 2025 Net Loss: $35.0 million.

Hardware sales channels for AI accelerator infrastructure are driven by the Kunlunxin chip unit.

• Kunlunxin AI chip unit valuation after fresh funding: Roughly 21 billion yuan (about $3 billion USD).
• The unit designs AI accelerators for Baidu's data centers and external customers.

Baidu, Inc. (BIDU) - Canvas Business Model: Customer Segments

You're looking at the core customer base for Baidu, Inc. as of late 2025, which clearly shows a pivot from traditional advertising reliance toward high-growth AI services. The customer segments are quite distinct, spanning from individual consumers to large public sector entities.

Small and Medium-sized Enterprises (SMEs) for online marketing

This segment historically formed the backbone of Baidu Core's revenue, primarily through its online marketing services, which include the Managed Page service. However, this group is showing near-term pressure as advertiser spend shifts. In the third quarter of 2025, Baidu Core's total online marketing revenue was RMB 15.3 billion, representing an 18% year-over-year decrease. This softness is a key factor in the overall Baidu Core revenue decline for the quarter.

Still, a subset of these businesses is adopting newer, AI-driven tools. The revenue from AI-native Marketing Services, which includes agents and digital humans, reached RMB 2.8 billion in Q3 2025, marking a massive 262% year-over-year increase. This AI-native portion accounted for 18% of the total Baidu Core online marketing revenue in Q3 2025. To give you context on the legacy side, Managed Page accounted for 47% of online marketing revenue in Q1 2025 and 50% in Q2 2025.

Large enterprise and public sector clients for AI Cloud services

This is where Baidu, Inc. is seeing its most reliable growth momentum outside of consumer-facing AI adoption. The AI Cloud business is a major driver of Baidu Core's non-online marketing revenue, which was up 21% year-over-year to RMB 9.3 billion in Q3 2025. Baidu AI Cloud was named the No. 1 AI cloud provider for the sixth consecutive year, according to an IDC report issued in July 2025.

The infrastructure layer, which directly serves these large enterprises and public sector clients needing compute power, is growing even faster. Revenue from AI Cloud Infra hit RMB 4.2 billion in Q3 2025, a 33% year-over-year jump. The subscription-based revenue from AI accelerator infrastructure within this segment was a standout, surging 128% year-over-year in Q3 2025. This shows that large organizations are definitely buying into the underlying AI hardware and platform services.

Mass Chinese internet users (consumer search and mobile ecosystem)

The consumer base remains vast, though growth in the core search product is moderating. The Baidu App is a primary touchpoint for this segment. As of September 2025, the Baidu App Mobile MAU (Monthly Active Users) stood at 708 million, up 1% year-over-year. Looking at earlier in the year, MAUs hit 735 million in June 2025. Overall, Baidu serves over 1 billion devices monthly, mostly in China.

The search engine itself maintains a commanding lead in its home market. As of July 2025, Baidu held a 56.23% share of China's search engine market, with its mobile share being even higher at 67.76% in April 2025. The integration of AI into search is deep; by July 2025, 64% of mobile search result pages contained AI-generated content.

Here's a quick look at the scale of the consumer ecosystem:

AI developers and researchers utilizing foundation models

This segment is crucial as it drives the adoption and ecosystem growth for Baidu's large language models, primarily the ERNIE series. Baidu is actively courting this group by promoting open access and platform services. The company announced the open-sourcing of the ERNIE 4.5 series through its MaaS (Model-as-a-Service) platform, Qianfan.

The scale of developer engagement is significant:

• Over 5 million developers globally are using Baidu AI open platform tools.
• The company's update frequency for its large models is rapid, averaging 3.8 days per update in Q3 2025, outpacing several competitors.
• Revenue from AI Applications, which includes subscription-based software products for individuals and enterprises, reached RMB 2.6 billion in Q3 2025, up 6% year-over-year.

Autonomous ride-hailing users in China and international markets

Users of the Apollo Go service represent a rapidly expanding, high-visibility customer segment. The service is scaling aggressively in both domestic and international markets, including Switzerland, Dubai, and Abu Dhabi, alongside major Chinese cities.

The operational metrics show explosive growth in this user base:

• Apollo Go provided 3.1 million fully driverless operational rides in Q3 2025, a 212% year-over-year surge.
• Cumulative rides provided to the public surpassed 17 million as of November 2025.
• The global footprint expanded to 22 cities as of October 2025.
• In Q2 2025 alone, the service completed over 2.2 million fully driverless rides, up 148% year-on-year.

To be fair, the growth in rides is impressive, but the cost structure is still under intense focus, with management projecting profitability by 2025. Finance: review the Q4 2025 capital expenditure forecast for Apollo Go by next Tuesday.

Baidu, Inc. (BIDU) - Canvas Business Model: Cost Structure

You're looking at the major outflows for Baidu, Inc. as it aggressively pivots to an AI-first structure. The cost side is showing clear signs of this transition-heavy investment in the future clashing with write-downs on the past.

The commitment to Research and Development (R&D) remains a top-line cost driver, especially for foundational AI models and infrastructure. For the second quarter of 2025, Baidu reported total Research and Development expenses of RMB 5.1 billion.

Digging into the segments, Baidu Core's R&D specifically was RMB 4.7 billion in Q2 2025, representing 18% of Baidu Core's revenue for that quarter, down from 20% in the same period last year. This decrease in R&D spend year-over-year, a 14% drop for Baidu Core, was explicitly attributed to a decrease in personnel-related expenses, which ties directly into the restructuring efforts.

The Cost of Revenues reflects the operational expense of running the AI Cloud business and content delivery. In Q2 2025, the Cost of Revenues was RMB 18.4 billion, marking a 12% increase year-over-year. Management pointed to increased costs related to the AI Cloud business and general content costs as the primary reasons for this rise. This is a critical trade-off: higher revenue growth in AI Cloud (up 27% year-over-year for Baidu AI Cloud in Q2 2025) is coming with a proportionally higher cost base.

The most significant single charge impacting profitability in late 2025 was the asset impairment. In the third quarter of 2025, Baidu recorded a RMB 16.2 billion impairment of long-lived assets. This massive write-down was attributed to a review showing that some existing infrastructure no longer met current computing efficiency standards required for modern AI workloads. This charge resulted in a reported net loss attributable to Baidu of RMB 11.23 billion for Q3 2025.

Capital expenditure (CapEx) is the physical manifestation of the AI strategy. Baidu is pouring capital into the necessary physical backbone. For instance, in Q2 2025, capital expenditures rose to USD 3.8 billion, a significant jump of more than 80% from USD 2.1 billion a year earlier, directly supporting the expansion of AI accelerator infrastructure and data centers. Overall, management noted that total capital expenditures in AI have exceeded well above RMB 100 billion since March 2023.

Personnel costs are a complex area given the simultaneous investment in AI talent and cuts in legacy areas. The company had 35,900 employees as of the end of 2024, down from 39,800 in 2023. The recent cost-cutting measures have been severe, with layoffs beginning in late 2025 across several groups, including the legacy Mobile Ecosystem Group (MEG), where some teams saw cuts as high as 40% of their workforce. Still, roles tied to AI and cloud computing were largely protected, with more resources directed to those areas.

Here's a quick look at the key cost-related metrics from the recent quarters:

The cost structure is clearly bifurcated. You see the shrinking costs in legacy areas, evidenced by the decrease in personnel-related expenses contributing to lower operating expenses in Q2 2025, but this is being overwhelmed by the massive, necessary spending on AI infrastructure and the resulting asset obsolescence charges.

The key cost pressures you need to track are:

• AI Cloud infrastructure build-out costs, driving up Cost of Revenues.
• The need for continued high CapEx, exceeding USD 3.8 billion in a single quarter.
• The risk of future impairments if AI hardware refresh cycles continue to accelerate.
• Severance and restructuring costs associated with the layoffs in legacy groups.

Finance: draft 13-week cash view by Friday.

Baidu, Inc. (BIDU) - Canvas Business Model: Revenue Streams

You're looking at the revenue side of Baidu, Inc.'s Business Model Canvas as of late 2025, focusing on the hard numbers from the latest reported quarter, Q3 2025. The picture is clearly one of transition, where legacy revenue is softening, but the AI bets are starting to show real scale, even if profitability is pressured by those very investments.

The core revenue streams are segmented, showing the shift in focus for Baidu, Inc. Here is a breakdown of the key components based on the Q3 2025 figures:

Total revenues for Baidu, Inc. in Q3 2025 were reported at RMB 31.2 billion, which represented a 7% decrease year-over-year. The Baidu Core segment brought in RMB 24.7 billion.

The growth story is heavily concentrated in the AI-powered businesses, which collectively generated roughly RMB 10 billion in revenue in Q3 2025, marking an over 50% increase year-over-year. This segment is where the future revenue quality is being established, often through recurring models.

The AI Cloud segment itself is a major driver, with its total revenue reaching RMB 6.2 billion, growing 21% year-over-year. This is further detailed by the infrastructure layer:

• AI Cloud Infra revenue: RMB 4.2 billion, up 33% year-over-year.
• Subscription-based AI accelerator infrastructure revenue: Grew 128% year-over-year.

The AI Applications revenue stream, which directly relates to your point on premium features, is also growing, albeit at a slower pace than the infrastructure side:

• Revenue from AI Applications: RMB 2.6 billion, increasing 6% year-over-year.
• Revenue from AI-native Marketing Services (agents and digital humans): RMB 2.8 billion, increasing 262% year-over-year.

The revenue from Subscription fees for AI applications and premium Ernie Bot features is embedded within the AI Applications figure of RMB 2.6 billion, as most of Baidu, Inc.'s AI applications are based on sticky subscription models, delivering high-quality revenue. The pressure on the legacy Online Marketing Revenue, which fell 18% year-over-year to RMB 15.3 billion, is being cushioned by the growth in the Non-Online Marketing Revenue, which rose 21% to RMB 9.3 billion, largely due to the boost from the AI Cloud business.

For iQIYI, the revenue stream from subscription and advertising was RMB 6.7 billion in Q3 2025, down 8% compared to the same period last year. Finance: draft 13-week cash view by Friday.