Baidu Group (9888.HK) has demonstrated that artificial intelligence has become a significant profit driver, with AI-related revenue reaching 40 billion yuan in 2025. In the fourth quarter alone, AI business revenue accounted for 43% of Baidu's core business income, surpassing market expectations.
The figures, disclosed in Baidu's fourth-quarter and full-year 2025 financial report released on February 26, indicate a fundamental shift in the company's revenue structure. Previously viewed as a long-term investment, Baidu's AI business has now transitioned into a measurable, high-growth revenue segment. Total revenue for 2025 reached 129.1 billion yuan, with AI contributing 40 billion yuan.
This transformation underscores Baidu's successful commercialization of its full-stack AI capabilities. The company's operating quality also improved significantly, with operating cash flow turning positive in the second half of 2025, generating a total of 3.9 billion yuan. Non-GAAP operating profit for the core business increased by 28% quarter-over-quarter to 2.8 billion yuan in the fourth quarter.
Baidu's AI commercialization strategy spans multiple scenarios, including business-to-business, consumer, and real-world applications. In the B2B segment, Baidu AI Cloud infrastructure revenue reached 19.8 billion yuan for the full year, a 34% year-over-year increase. High-performance computing subscription revenue grew by 143% in the fourth quarter.
On the consumer side, AI application revenue exceeded 10.2 billion yuan in 2025, with 2.7 billion yuan generated in the fourth quarter. Monthly active users for Wenxin Assistant reached 202 million by December 2025, with usage surging during the Spring Festival period. Autonomous ride-hailing service Apollo Go completed 3.4 million rides globally in the fourth quarter, a more than 200% increase year-over-year.
Concurrently, Baidu announced a new $5 billion share repurchase program, representing nearly 10% of its current market capitalization, and plans to issue its first dividend in 2026. These moves signal management's confidence in future cash flow and profitability. Additionally, the spin-off and separate listing of Kunlun Chip, Baidu's AI computing unit, is underway, with an IPO application submitted to the Hong Kong Stock Exchange in January 2026.
Financial institutions including J.P. Morgan and Benchmark have raised their price targets for Baidu, reflecting optimism about the company's AI-driven transformation. Analysts note that Baidu's valuation logic is evolving, with investors increasingly applying sum-of-the-parts valuation to better capture the value of its diverse business segments.