Baidu, Inc. is enhancing its AI capabilities with the introduction of the ERNIE family of large language models, including ERNIE 4.5 and X1 Turbo. The company’s AI Cloud revenues surged 42% year-over-year in Q1 2025, now representing 26% of Baidu’s core revenues. However, Baidu’s strategy extends beyond ERNIE, focusing on its comprehensive AI ecosystem that includes diverse applications and services.
While Baidu’s ERNIE leads the AI foundation model race in China, competitors Alibaba and Tencent are also solidifying their positions with models like Tongyi Qianwen and Hunyuan, respectively. Baidu’s shares have dropped 12% over the past three months, whereas the industry has seen a modest rise of 5.6%. Baidu’s forward 12-month P/E ratio stands at 8.63, significantly lower than the industry average of 18.13.
