Goldman Sachs has released a research report indicating that Baidu Group-SW's (09888) first-quarter results for this year show accelerated growth in cloud business revenue, particularly in GPU-based cloud services. The firm anticipates that Baidu's AI-driven business will grow by more than 30% year-over-year, primarily benefiting from robust growth in AI cloud infrastructure (approximately over 50% year-over-year). Goldman Sachs projects that by the end of 2026, the contribution from AI-driven business will surpass that of traditional/other segments. Management disclosed during an analyst meeting that Baidu aims to outpace the market and major peers in cloud business growth over the coming quarters. The company has observed a shift in token usage from training to inference, which is expected to help Baidu Cloud expand its customer base. The report cites management stating that the current capabilities of the Ernie model are lagging, and future R&D will focus on revitalizing the model's capabilities, prioritizing the development of Ernie to drive MaaS (Model as a Service) revenue. Goldman Sachs expects a medium-term gross margin target of 35% to 40% for the GPU cloud business, compared to 25% to 30% for traditional CPU and memory services. Management aims for AI-driven business to account for over 50% of total revenue and seeks to reduce the holding company discount through rapid growth in core cloud/chip revenue.