Business Description
Baidu is a leading technology company in China. Its mission is to make the complicated world simpler through technology. Baidu's product line is very similar to Alphabet, although with less success and is mostly confined to China. It owns the top search engine in China: Baidu, which has about 70% market share in China. Besides that, it also owns the following popular apps and services:
Baidu Maps: 520 million MAU (second to Gaode Map in China, or Amap, 605 million MAU)
Various consumer mobile apps: Baidu Baike (an online encyclopedia), Baidu Tieba (a popular online forum), and Baidu Knows (a question-and-answer platform), Haokan, Quanmin
Baidu Cloud: consumer cloud storage service
AI Cloud: Enterprise cloud solution
DuerOS: The operating system for its Xiaodu smart devices. Xiaodu has over 200 million connected devices.
Apollo: A suite of technology that supports L3 and L4 self driving. It also operates Apollo Robotaxi, which is running pilot programs in Beijing, Changsha, and Cangzhou. Since 2020, Baidu fully opened the Apollo Robotaxi service to public in Beijing.
EV company: formed with Zhejiang Geely Holding Group for Intelligent EVs
Ernie-Bot: a counterpart of ChatGPT
iQiyi: Baidu owns 53% of this Chinese video streaming service. IQiyi has the largest market share in China with 68% of adults had watched it in 2022 (Tencent Video is second at 66% of adults, source).
Baidu also has 10.3% of Ctrip (source).
In its own words, "Baidu is already a leading AI company with a strong Internet foundation. We are one of the very few companies in the world that offers a full AI stack, encompassing an infrastructure consists of AI chips, deep learning framework, core AI capabilities, such as natural language processing, knowledge graph, speech recognition, computer vision and augmented reality, as well as an open AI platform to facilitate wide application and use. We have put our leading AI capabilities into our products and services, as well as innovative use cases."
The founder of Baidu, Robin Li, is a top computer scientist in China. He is pretty much like Jeff Dean in Google. From Wikipedia, "the founder of Baidu Robin Li published his RankDex paper in 1997, a year before Larry Page's PageRank in 1998. And Larry was clearly aware of RankDex when he founded Google."
2023 segments breakdown (millions RMB):
2022 segments breakdown (millions RMB):
Non-gaap diluted earnings per ADS:
SWOT analysis
Strengths
Top leading technology in China including Search, Maps, AI, AI chips, self-driving
Largest market share in Search in China
Multiple consumer facing apps with hundred millions of users
Robin Li, the founder of Baidu, is a top computer scientist in China.
Weaknesses
Execution has been subpar compared with Alibaba, Tencent. Not to mention Tiktok, Pinduoduo, etc.
Opportunities
Its AI technology is leading in China, so it may benefit the most from LLM.
Its self-driving technology and Robotaxi are very promising in commercialization.
Threats
Chips ban affects Baidu's AI effort
China geopolitical risk
Its cloud service is inferior to Alibaba cloud, and maybe even to Tencent cloud and Huawei, at least in terms of market share. It may signal a very poor execution of the company.
References
https://ir.baidu.com/Baidu-Core
2023/12 https://www.statista.com/statistics/1212017/china-leading-map-apps-based-on-monthly-active-users/
Updates
2026/09/18 Gave up Baidu
Over years, Baidu has not made much progress for its various business lines:
Various consumer mobile apps became obsolete: Baidu Baike (an online encyclopedia), Baidu Tieba (a popular online forum), and Baidu Knows (a question-and-answer platform), Haokan, Quanmin
AI Cloud: not able to catch up to other leaders at all. Now it's only for serving the ERNIE model, which has tons of more capable competitors in China.
Ernie-Bot: too much behind Doubao, Kimi, Qwen, DeepSeek
AI Cloud and LLM chatbot were very important for Baidu to sustain its growth. Since Baidu lost these important business lines, the growth prospect of Baidu is very doomed.
These are the business lines which are still holding their places, but they don't earn much money:
Baidu Search: while still the leader, it's getting obsolete because of the thrive of various LLM chatbots. People like chatbots because they bypass various ads on Search. The digital advertising landscape has changed in China – are migrating away from traditional text-based search toward short-video platforms (such as Douyin and Kuaishou), social media commerce ecosystems (such as Xiaohongshu), and increasingly, rival AI chatbots. The strategic move of showing AI generated content on the prime real estate of its search result also cannibalizes its legacy business by lowering the impressions and click-through rates of paid results.
Baidu Maps
iQiyi
Baidu Cloud (leader in the cloud storage business on the consumer side, but the enterprise side is owned by Alibaba)
DuerOS
Apollo: while it's still the leader, the rollout is very slow and is very likely to be too slow to provide enough investment values for Baidu
2025 segments breakdown (millions RMB, from 2025 Q4 financial results):
The financial performance of Baidu was a disaster. Its revenue is even lower than 2023, and I don't see the financials can be fixed due to the ongoing increased cost in AI capex.
The market cap is about $31 billion, which is very undervalued compared with a brief sum-of-the-parts analysis. However, it's just a cigarbutt play, not a growth play anymore. I doubt its capital allocation can make it a worthwhile investment, so I am giving up Baidu.
2024/03/05 Valuation
Sum of the parts valuation:
Diluted shares outstanding: 2.837 billion shares, that is 355 million ADS
It has the following options value:
AI Cloud
Ernie AI
Apollo
Baidu has a geopolitical risk due to China, so similar to Alibaba, I would limit the position to less than 5%.
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