By Tracy Qu

Baidu reported its worst-ever revenue decline as advertising demand remained weak, undermining the Chinese search-engine giant's investment efforts in growth areas like AI as it seeks to revive a flagging business.

The internet company said Tuesday that third-quarter revenue fell 7.1% from a year earlier to 31.17 billion yuan, equivalent to $4.39 billion. The quarterly revenue drop was Baidu's biggest on record, according to Wind data dating back to 2006.

The company swung to a net loss of 11.23 billion yuan from profit of 7.63 billion yuan a year earlier, hurt by an impairment charge for long-lived assets related to its core business. Excluding that, profit was 2.6 billion yuan, Baidu said.

Once considered one of China's important technology titans alongside Alibaba and Tencent, Baidu has been facing pressure on both its top and bottom lines as its main advertising business slows. Seeking new avenues of growth, the Beijing-based company has been investing heavily in fields such as artificial intelligence, self-driving technology and chip development.

Baidu unveiled two AI chips last week as Chinese tech companies ramped up their chip-making efforts, responding to Beijing's calls for technological self-sufficiency.

Its Ernie Bot--the first real Chinese contender to ChatGPT--remains one of China's most popular chatbots. The company introduced a new version of its foundation model at its annual tech event in November, saying that Ernie 5.0 can comprehend user commands in various media formats.

In the third quarter, Baidu logged a 33% increase in revenue from AI cloud infrastructure to 4.2 billion yuan, with subscription-based revenue from AI accelerator infrastructure growing 128%.

The company also made progress in the robotaxi space. Apollo Go, its autonomous ride-hailing service, made 3.1 million driverless operational rides during the quarter, completing more than 17 million rides as of November, it said.

Baidu's core business was a weak spot, however, with sales from online-marketing services, which make up more than half of overall revenue, dropping 18%. Revenue from the company's iQIYI video-streaming service fell about 8%.

Analysts expect the drag from ad revenue to persist in the final quarter of the year. As the company pushes ahead with its transition, integrating AI-generated content into its search results, the shift will continue to weigh on its advertising business, Citi analysts said.

Write to Tracy Qu at tracy.qu@wsj.com

(END) Dow Jones Newswires

November 18, 2025 07:20 ET (12:20 GMT)

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