Baidu (NASDAQ:BIDU) executives used the company’s fourth quarter and fiscal year 2025 earnings call to highlight accelerating momentum in AI-related businesses, including AI cloud infrastructure, applications, and robotaxi operations, alongside new shareholder return initiatives and a proposed spin-off of its AI chip unit Kunlunxin.
AI-powered revenue mix and strategic focus
CEO Robin Li said Baidu’s “general business” revenue in the fourth quarter totaled CNY 26.1 billion, and revenue from the company’s “core AI-powered business” exceeded CNY 11 billion, representing 43% of general business revenue. Management defined the core AI-powered business as including AI cloud infrastructure, AI applications (such as Baidu Wenku and Baidu Drive), Apollo Go robotaxi operations, and AI-native marketing services including agents and digital humans.
AI cloud infrastructure growth and enterprise adoption
On AI cloud infrastructure, Li said subscription-based revenue from AI accelerator infrastructure grew 143% year-over-year in Q4, accelerating from 128% growth in Q3, and achieved triple-digit growth for full-year 2025. CFO Henry Hai Jianhe later said total revenues in Q4 were RMB 32.7 billion, up 5% quarter-over-quarter, “primarily due to an increase in Baidu core AI-powered business.”
Li said Baidu’s AI cloud infrastructure is supported by a mix of domestic and international high-performance computing resources, and emphasized advantages from owning and optimizing across four layers of an end-to-end AI architecture. He also pointed to expanding adoption across industries including internet services, gaming, autonomous driving, and embodied AI. In particular, he said embodied AI revenue “double[d] quarter-over-quarter in Q4,” and Baidu onboarded additional humanoid robotics companies.
During Q&A, Baidu executive Daoxian (“Dove”) said Baidu’s AI cloud revenue—combining AI cloud infrastructure and AI applications—reached CNY 30 billion for full-year 2025. Dove said AI cloud infrastructure revenue grew 34% year-over-year, and reiterated that AI accelerator infrastructure subscription revenue had become the “primary growth driver.” Looking to 2026, Dove said management remained “highly confident” in sustaining strong growth, driven by demand for both training and inference workloads as enterprise deployments deepen.
Foundation model updates and application-driven approach
Li addressed heightened competition in foundation models and said Baidu’s strategy remains “application-driven,” arguing that “applications matter more than models” because models create value through use cases. He noted Baidu released an updated version of ERNIE 5.0 in January following its unveiling the prior quarter and restructured the model development organization into two teams: one focused on advancing frontier foundation model capabilities, and another tailoring models for specific business needs to reduce costs, improve latency, and optimize size and efficiency.
Li also said Baidu is open to using other models where they are better suited, describing application outcomes as the priority.
AI applications: search, assistants, digital humans, and no-code tools
Li described ongoing changes to Baidu’s AI-powered search experience, including AI-generated infographics and expanded “MCP capabilities” across scenarios such as e-commerce, healthcare, and local services, enabling actions like shopping and booking within search. He also said Baidu integrated OpenClaw, an open-source agent framework, into the Baidu App during the Chinese New Year period, citing the app’s roughly 700 million MAU as a distribution advantage.
Li said Ernie Assistant—Baidu’s AI chatbot integrated across its platform—added broader multimodal capabilities, helping drive MAU to exceed 200 million in December. He added that Baidu’s AI search API saw adoption accelerate in Q4, with call volume up more than 110% quarter-over-quarter, and said multilingual capabilities are opening opportunities for the international market.
On digital humans, Li said the number of digital humans livestreaming on Baidu’s platform increased nearly 200% year-over-year in December 2025. He also cited partnerships with companies including Jingdong, Zuoyebang, and TikTok. Li said production costs for Baidu’s “hyper-realistic digital human” declined to roughly one-third of the previous quarter’s levels.
Li also discussed Miaoda, a natural-language coding platform, and said after launching its international version “Midu,” global users had created more than 1 million AI applications as of early February without writing code.
Separately, Julius Zhiyong Luo, EVP in charge of Baidu’s Mobile Ecosystem Group, discussed competition in consumer AI products and said Baidu’s approach remains focused on user needs. He cited improvements to Ernie Assistant including better answer accuracy and relevance through retrieval-augmented generation (RAG), multilingual capabilities for broader information access, and expanded MCP agent connections to services. Luo said nearly 100 service capabilities were added during the quarter across healthcare, travel, education, and commerce, and stated that the e-commerce MCP module saw “very strong GMV growth quarter-over-quarter.” He said Baidu is taking a “measured approach” to monetization, prioritizing product quality and user experience, with monetization expected to follow as products mature.
Apollo Go scaling, global expansion, and unit economics
Li said Apollo Go delivered 3.4 million fully driverless operational rides in Q4, with weekly rides peaking above 300,000, and total rides up more than 200% year-over-year. For full-year 2025, Li said Apollo Go delivered more than 10 million fully driverless rides and surpassed 20 million cumulative public rides as of February 2026. He said Apollo Go’s footprint reached 26 cities worldwide.
Li detailed international updates for 2026, including plans with Uber and Lyft to pilot autonomous vehicles in London with testing expected in the first half of 2026; testing in St. Gallen, Switzerland; progress in Abu Dhabi and Dubai (including a fully autonomous service launch on Yas Island in January with AutoGo and a fully driverless testing permit in Dubai); entry into South Korea starting in the Seoul metropolitan area; and expanded Hong Kong testing.
In response to a question on overseas strategy and valuation, Li said robotaxi has reached a “tipping point globally” and argued Apollo Go has a cost advantage through its RT6 vehicle, which he said costs under $30,000. He also said Baidu was first to achieve unit economics breakeven in Wuhan in late 2024 and aims to reach breakeven in more cities. On strategic options, Li said Baidu will “remain flexible” and evaluate paths to maximize long-term shareholder returns, while emphasizing execution and sustainable growth.
Kunlunxin spin-off and shareholder returns
Li said Baidu announced a proposed spin-off and separate listing of Kunlunxin, describing it as the result of more than a decade of investment in self-developed AI chips and a validation of long-term strategy. Management highlighted chip compatibility, performance, inference efficiency, and deployments with enterprise customers across industries including financial services, telecommunications, energy, and internet sectors.
CFO Henry said Baidu also announced a new $5 billion share repurchase program and adopted a dividend policy for the first time. In Q&A, he said the company plans to execute the buyback “on a regular basis in a very disciplined and transparent manner,” and said the dividend policy and buyback are intended to strengthen shareholder returns and broaden the investor base.
Financial results and cash flow
Henry reported total revenues of RMB 32.7 billion in Q4 and RMB 129.1 billion for full-year 2025, with the annual decline attributed to weaker legacy business partially offset by growth in core AI-powered business. Q4 operating income was RMB 1.5 billion (5% operating margin), while Baidu recorded an operating loss of RMB 5.8 billion for 2025, which included RMB 16.2 billion in impairment of long-lived assets attributable to an impairment loss of a core asset group. Excluding impairment, operating income was RMB 10.4 billion for 2025.
- Q4 non-GAAP operating income: RMB 3.0 billion (9% margin)
- FY2025 non-GAAP operating income: RMB 15.0 billion (12% margin)
- Q4 net income attributable to Baidu: RMB 1.8 billion; diluted EPS per ADS RMB 3.71
- Q4 non-GAAP net income attributable to Baidu: RMB 3.9 billion; non-GAAP diluted EPS per ADS RMB 10.62
- FY2025 net income attributable to Baidu: RMB 5.6 billion; diluted EPS per ADS RMB 11.78
- FY2025 non-GAAP net income attributable to Baidu: RMB 18.9 billion; non-GAAP diluted EPS per ADS RMB 53.41
Henry said operating expenses rose 10% quarter-over-quarter in Q4 to RMB 13.0 billion, driven by higher expected credit losses and a one-time employee severance cost “to improve efficiency.” He also said operating cash flow was RMB 2.6 billion in Q4, and noted cash flow turned positive in Q3 and remained positive in Q4, totaling CNY 3.9 billion across the two quarters. As of Dec. 31, 2025, Baidu reported total cash and investments of RMB 294.1 billion and approximately 29,000 employees in Baidu General Business.
Capital investment priorities
On AI investment, Henry said Baidu has invested more than RMB 100 billion in AI since launching ERNIE in March 2023 and plans to “continue to maintain this level” of investment density. He said the company is focused on balancing investment with profitability and returns, and cited efforts including operational and financing leasing and access to low-cost bank borrowings. He added that Baidu expects operating cash flow to remain positive going forward even with continued AI investment.
About Baidu (NASDAQ:BIDU)
Baidu, Inc, founded in 2000 and headquartered in Beijing, is a Chinese multinational technology company best known for operating one of China’s leading internet search engines. The company built its business around online search and related advertising services, providing search, content aggregation and targeted ad placements to consumers and marketers across China. Baidu went public on the NASDAQ in 2005 and has since diversified beyond search into a broader technology and AI-focused portfolio.
Core products and services include the Baidu search platform and mobile app, Baidu Maps and Baidu Baike (an online encyclopedia), along with digital content initiatives.
