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——Focus on data and change business
On August 22, Beijing time, Baidu released its unaudited financial report for the second quarter ending June 30, 2023. In the second quarter, Baidu achieved revenue of 34.1 billion yuan, a year-on-year increase of 15%; net profit (non-GAAP) attributable to Baidu reached 8 billion yuan, a year-on-year increase of 44%. Both revenue and profit achieved substantial growth, exceeding market expectations.
Thanks to the solid performance of the online marketing business and the promotion of operating leverage, Baidu's core revenue and profit growth accelerated. In the second quarter, Baidu's core revenue was 26.4 billion yuan, a year-on-year increase of 14%. Baidu's core operating profit (non-GAAP) increased by 27% year-on-year to 6.51 billion yuan, and the operating profit margin was 25%, which is an increase from 22% in the second quarter of 2022 and 23% in the first quarter of 2023. Baidu Core's online marketing revenue was 19.6 billion yuan, a year-on-year increase of 15%. Baidu Core generated a net cash flow of approximately 9.7 billion yuan in operations.
"Generative AI and large language models have tremendous transformative capabilities in many industries and provide us with significant market opportunities. Baidu continues to upgrade models to generate more creative answers, improve training speed and reduce inference costs, maintaining industry leadership." Robin Li, founder, chairman and CEO of Baidu, said, "Wenxin Model 3.5 has been widely recognized by cloud customers, AI developers and industry experts. Baidu is using AI-native thinking to reconstruct products and services to provide users with innovative Experience, and support enterprises to seize opportunities. Baidu is committed to building new engines around generative AI and big language models to drive long-term growth."
Luo Rong, Chief Financial Officer of Baidu, said: "Baidu has been investing in the AI field for more than ten years, and is fully capable of seizing the opportunities brought by generative AI and large language models. We will continue to invest firmly in AI and accelerate in the next few quarters. Big investment in big language models and generative AI."
Strong fundamentals: Smart Cloud ranks No. 1 in the market share of AI public cloud, Carrot Kuaipao leads the world in driverless driving
In addition to achieving substantial growth in revenue and profits, Baidu Smart Cloud, smart driving, user products and other basic disk businesses also continued to grow at a high speed in the second quarter, ushering in breakthroughs and leading the industry.
As an AI-tuned cloud infrastructure, Baidu Smart Cloud provides powerful computing power for large-scale model training and rapidly expands its cooperative customer base. The Qianfan large-scale model platform launched by Baidu Smart Cloud not only provides large-scale model services including Wenxin Yiyan and third-party large-scale model services, but also provides a complete tool chain for large-scale model development and application, which can help enterprises solve large-scale model development and Any questions during the application process. In the second quarter, the number of contracted customers of Baidu Smart Cloud continued to increase, including external enterprises such as Industrial Bank, China Southern Network General Research Institute, Hande Information, Kingdee, and iSoftStone.
Recently, the "IDC China AI Public Cloud Service Market Share, 2022" report shows that Baidu Smart Cloud has the largest market share. This is the eighth time that Baidu Smart Cloud has ranked first for four consecutive years.
In terms of intelligent driving, Baidu's self-driving travel service platform, Carrot Kuaipao, rapidly expanded its operating scale. In the second quarter, Carrot Kuaipao provided 714,000 rides, a year-on-year increase of 149%. As of June 30, 2023, Carrot Kuaipao has provided a total of 3.3 million rides to the public.
In June of this year, Carrot Run won the first batch of unmanned commercialization pilot notices issued by Pingshan District, Shenzhen. At present, Carrot Run has been approved to provide fully unmanned autonomous driving travel services to the public in Wuhan, Chongqing, Beijing and Shenzhen. In July this year, Carrot Kuaipao obtained the first batch of licenses issued by the Pudong New Area of Shanghai, allowing fully unmanned autonomous driving tests to be carried out on public roads.
In June, the monthly active users of Baidu App reached 677 million, a year-on-year increase of 8%, and Baidu's user base is stable. In addition, according to data from IDC and Canalys, Xiaodu will rank first in China's smart screen and smart speaker shipments in the first quarter of 2023.
Completely reconstruct the product line with AI native thinking: improve user experience and advertising monetization, and promote long-term growth
While the basic disk business is growing strongly, Baidu is building AI native applications with Wenxin large model and Wenxin Yiyan, completely reconstructing the product line, bringing new growth drivers, and gaining more room for growth in the future.
Baidu Search is currently testing functions such as "Extreme Satisfaction", "AI Partner" and "AI BOT". Among Baidu Search's existing Q&A requests every day, the first satisfaction rate has reached 70%, and Baidu Search's daily new Q&A requests exceed 5,000 million times. In May, Baidu Wenku announced the internal test of "AI Document Assistant", and realized the reconstruction of the traditional learning and office mode with the help of AI technology such as large models. Baidu’s intelligent work platform Ruliu has created an AI assistant “Super Assistant” based on the ability of large models, which can compress hourly tasks to minutes or even seconds, such as automatically summarizing meeting minutes, creating meeting invitations, asking for leave, applying for business trips, etc. It can be completed with one key.
Baidu’s marketing products were also reconstructed by the large model. Baidu’s marketing AIGC business creative platform "Qingruo" breaks through the bottleneck of creative productivity through multi-modal content generation, generating 100 creative copywriting in 2 minutes and generating a number in 3 minutes Human modeling, a complete digital population broadcast video can be produced in 5 minutes, which has brought an increase in the conversion rate for advertisers, thereby bringing better monetization effects.
The rapid implementation of AI native applications benefits from the performance improvement of the underlying large model. In the second quarter, Baidu launched Wenxin Large Model 3.5, which is jointly optimized by Flying Paddle and Wenxin. The training speed is three times faster than the original one, and the inference speed is more than 30 times faster. According to the "AI Large-scale Model Technical Capability Evaluation Report, 2023" released by IDC, Wenxin Large-scale Model 3.5 scored 7 full marks in 12 indicators, ranking first in comprehensive score, algorithm model, and industry coverage.
On August 16, at the WAVE SUMMIT Deep Learning Developer Conference 2023, Baidu released a series of technologies, products and ecological achievements such as the Wenxin large model, the flying paddle platform, and AI native applications such as flow. At present, Paddle Ecology has gathered 8 million developers, served 220,000 enterprises and institutions, and created 800,000 models based on Paddle.
In addition, in order to further promote the healthy development of the large-scale model ecology, in May this year, Baidu announced the launch of the "Wenxin Cup" entrepreneurial competition and the establishment of a 1 billion investment fund. The highest award of the "Wenxin Cup" is an early investment worth 10 million yuan, which attracted nearly 1,000 projects to participate within one month.
