The strength of Baidu stock (NASDAQ: BIDU), China’s largest internet search company, was underscored on Wednesday as the company announced a US$5 Billion Share Repurchase Program.
The news came at the same time the company released its fourth quarter and fiscal year 2022 Results, which beat most analyst expectations.
For the fourth quarter of 2022, Badiu posted revenue of US$4.8 billion. And for the full fiscal year, the company posted a net profit of just over US$720 million.
While Baidu is best known as the ‘Google of China’ – generating the bulk of its revenue from search – it’s the tech giant’s AI capability that has investors excited.
Guide: How to invest in Chinese stocks: 5 ways to begin in 2023
Baidu’s AI capabilities
Year-to-date, Baidu stock listed on the NASDAQ has gained around 20%. This is mostly due to strong sentiment surrounding AI technology.
After Microsoft’s high profile investment in ChatGPT earlier this year, investors quickly turned their attention to Baidu, which has quietly been developing its AI capabilities for around a decade.
Back in 2014, Baidu poached Google’s head of AI, Andrew Ng, to lead its internal AI development, and the company has never looked back.
“With our long-term investments in AI, we are poised to capitalize on the imminent inflection point in AI, unlocking exciting new opportunities across our entire business portfolio – from mobile ecosystem to AI Cloud, autonomous driving, smart devices, and beyond,” commented Baidu’s co-founder and CEO, Robin Li, in the company’s results announcement today.
So what is Baidu doing in the AI space? Here’s some of the key initiatives investors should know about.
ERNIE Bot
This week it was announced that the ERNIE Bot will be made available as part of the Baidu AI Cloud offering.
The ERNIE bot is a ChatGPT-like application. Baidu expects full testing to be completed in March and says it has already signed on over 300 companies from various industries, such as IT, media, finance, insurance, and automotive, to use to AI bot.
AI Cloud
While ERNIE is set to be integrated into the Baidu AI Cloud, the cloud itself is a jewel in Baidu’s AI crown.
Baidu was ranked the top AI Cloud provider for the fourth consecutive year in 2022, by IDC.
The cloud also underpins what’s known as Baidu ACE – AI-powered transportation and navigation technology that powers robotaxis, robobusses and other autonomous vehicles in 69 cities.
Further, there are now 5.35 million users on Baidu AI Cloud’s developer community, known as PaddlePaddle.
Intelligent Driving
Apollo Go, Baidu’s autonomous ride-hailing service, is also underpinned by Baidu’s AI capabilities and it is growing at a staggering pace.
Baidu says Apollo Go provided 561K rides in the fourth quarter of 2022, up 162% year over year, with cumulative rides provided to the public exceeding 2 million by the end of January 2023.
Apollo Go received Beijing’s first license to test vehicles with no driver or safety operator in the car in December 2022. Arguably, this makes Baidu the closest company anywhere in the world to providing large-scale fully driverless ride-hailing services on public roads.