China's Baidu Posts Strong Q3 Results... Robin Li Says "Sufficient AI Chip Reserves"

Net Profit Approaches 7.3 Billion Yuan
AI Ernie Bot Secures 70 Million Users

Baidu, a leading Chinese artificial intelligence (AI) company, announced a net profit of 7.3 billion yuan (approximately 1.3236 trillion KRW) for the third quarter. The company also emphasized that it has stockpiled a 'sufficient amount of AI chips' to mitigate the impact of U.S. technology export restrictions.

According to local media such as Caixin on the 21st, Baidu reported third-quarter revenue of 34.447 billion yuan, a 6% increase from the previous year, and a net profit of 7.3 billion yuan, a 23% surge. The company stated that both revenue and net profit exceeded market expectations, marking a strong performance.

[Image source=AFP Yonhap News]

Additionally, Baidu's core services, which combine search engine and advertising, recorded a net profit increase of 21% to 7 billion yuan. The generative AI chatbot Ernie Bot (文心一言), launched in March, has reached 70 million users. The company reported that third-quarter research and development (R&D) expenses rose 6% year-on-year to 6.1 billion yuan, with a significant portion of the investment directed towards Ernie Bot.

More attention-grabbing than the better-than-expected results was the mention of U.S. export control measures on China. Baidu CEO Robin Li stated after the earnings announcement, "The short-term impact of chip export restrictions to China on Baidu is limited," adding, "We believe our chip inventory is sufficient to support AI basic applications for end users."

However, he noted, "U.S. sanctions on companies like Nvidia exporting advanced AI chips to China will affect China's overall AI development," and predicted, "This shortage could trigger the integration of large language models (LLMs) within China." According to CEO Li, there are more than 230 LLMs in China. Regarding the third-quarter results, he explained, "Baidu has demonstrated resilience despite the challenging economic environment."

[Image source=EPA Yonhap News]

Earlier, major foreign media reported that earlier this month Baidu ordered 1,600 Huawei AI semiconductor 910B Ascend AI chips in response to U.S. export regulations. Tencent, China's largest information technology (IT) company, has also stockpiled a large number of Nvidia AI semiconductors, stating that this will enable the development of several future generations of AI models. The U.S. banned the export of Nvidia's A100 and H100 chips to China last year and further restricted exports of Nvidia's China-specific versions, the A800 and H800, last month.

Baidu CFO Luo Long emphasized, "Our continuous investment in AI has supported technological and product innovation," adding, "Baidu will continue to prioritize investments in AI, especially generative AI and foundational models."

Furthermore, Baidu reported that the number of rides operated by its robotaxi Apollo Go increased from 714,000 in the second quarter to 821,000 in the third quarter. In September, the Yizhuang Economic and Technological Development Zone on the outskirts of Beijing allowed local robotaxi operators to charge fares for fully driverless autonomous taxis. These taxis are already operating in Wuhan, China, and reportedly accounted for more than 40% of regional orders in the third quarter.

Meanwhile, Baidu announced in a statement that starting January 1 next year, Xu Lan, CEO of the Chinese e-commerce giant JD.com, will be appointed as an independent director on the company's board.

This content was produced with the assistance of AI translation services.