On the evening of November 21st, Baidu released its third quarter 2024 performance announcement. According to the announcement, Baidu's total revenue for the third quarter was 33.6 billion yuan, with core revenue of 26.5 billion yuan; The net profit attributable to Baidu's core was 7.54 billion yuan, a year-on-year increase of 17%.
During the evening conference call, Baidu AI's long-term strategy became a key keyword repeatedly emphasized by company executives.
Robin Lee, founder, chairman and CEO of Baidu, said: "At present, the AI function of Baidu App has covered nearly 70% of its monthly active users, and the total number of daily interactions can reach tens of millions of times. In Baidu search, more than 20% of search results pages have covered AI generated content."
The new version of the large model will be released in early 2025
The announcement shows that in November, the daily average call volume of Baidu Wenxin's large model reached 1.5 billion times, and the daily processing of Token text exceeded 1.7 trillion yuan. Compared to the initial disclosure of 50 million times in the fourth quarter of last year, it has increased 30 times within a year. Robin Lee also disclosed on the conference call that Baidu will release a new version of Wenxin's big model in early 2025. By November 2024, the number of ERNIE Bot users has reached 430 million, with an increase of more than 500% within one year.
The performance announcement shows that Baidu's core online marketing revenue reached 18.8 billion yuan during the quarter. At present, Baidu is continuously promoting the reconstruction of search models and enriching the search experience through intelligent agents and other content.
During the reporting period, Baidu continuously improved its ability to iterate the Wenxin big model and optimize its efficiency. Based on self-developed four layer artificial intelligence technology stack optimization, the inference efficiency of the flagship model Wenxin 4.0 Turbo has significantly improved, with a 48% increase in model performance since its release in June.
At the same time, Baidu customizes basic models for different application scenarios and expands its portfolio of lightweight model products. In the third quarter, Baidu launched two enhanced lightweight models, ERNIE Speed Pro and ERNIE Lite Pro. Compared with the ERNIE Speed and ERNIE Lite models launched in the previous quarter, the enhanced models have lower latency, higher throughput, better stability, and higher accuracy.
Robin Lee said that AI Protochem will bring new growth potential to Baidu's business. The big model can communicate with users in natural language for many rounds. Baidu is trying to provide chat robot type advertising products for small and medium-sized enterprises and brand users to improve the efficiency of advertising conversion.
[align center] Adhere to the long-term strategy of AI
The proportion of AI revenue continues to increase, building Baidu's second growth curve.
According to the report released by IDC, the overall scale of China's AI public cloud service market will reach 12.61 billion yuan in 2023, with Baidu AI Cloud taking up 26.4% of the market share, ranking first in the Chinese market for five consecutive years.
Driven by generative AI and basic models, China's cloud computing industry is accelerating its transformation towards intelligent computing. Robin Lee said that the revenue of Baidu AI Cloud in the third quarter reached 4.9 billion yuan, up 11% year on year. Among them, the proportion of AI related revenue continues to increase to over 11%.
Baidu's technological advantage in AI infrastructure is a key factor driving the growth of intelligent cloud performance. In the third quarter, Baidu AI Cloud further improved the management ability of tens of thousands of card clusters and achieved 99.5% effective training duration. Meanwhile, through ModelBuilder, lightweight models can be fine tuned to proprietary models with performance similar to Wenxin 4.0, lower cost, and faster inference speed.
It was disclosed on the conference call that the growth of Baidu AI Cloud in the third quarter was mainly driven by the high demand for model training and reasoning in the Internet, education, finance and other industries, among which the incremental revenue from corporate customers at the waist increased by 170% month on month.
Meanwhile, Baidu has also established partnerships with companies such as Shansend, Kingdee, and Tuhu Car Maintenance. In the catering industry, Yum! Brands China has deployed the AI intelligent customer service system "Ke Yue" based on the Wenxin big model. During peak hours, the daily call volume of the "Ke Yue" API reached millions of times; In the field of education, "Exam Treasure" has achieved intelligent analysis of test questions by calling the Wenxin big model, reducing the cost of analyzing a single test question by 99.8%, increasing the proportion of paying users by more than 100%, and increasing revenue by 246%.
App AI features have covered nearly 70% of monthly active users
Currently, the AI function of Baidu App has covered nearly 70% of monthly active users, with a total daily interaction frequency of tens of millions. It is understood that the AI function of Baidu search can bring rich content such as AI, images, videos, intelligent agents, digital humans, etc., to enhance user experience.
As an important form of enriching Baidu search content and experience, public data shows that there are 150000 enterprises and 800000 developers on the Baidu Wenxin intelligent agent platform.
With AI, Baidu's "old" applications have also been revitalized. In September, the MAU (monthly active users) of Baidu Wenku's AI function exceeded 50 million, a year-on-year increase of over 300%; The willingness of users to pay continues to increase, with subscription revenue growing by 23% year-on-year in the third quarter. At the recent Baidu World 2024, Baidu Wenku and Baidu Netdisk jointly created a tool based intelligent agent called "Free Canvas", which attracted over 200000 people to queue up for appointments on its first day of debut.
Baidu stated that the company is currently further lowering the threshold for AI application development to promote the prosperity of the AI application ecosystem. "We believe that expanding AI capabilities beyond the programmer population will promote the next wave of innovation and release huge social value," said Robin Lee.
JPMorgan maintains its overweight rating on Baidu. The institution stated that with the recovery of consumption in 2025, Baidu is more likely to gain higher exposure in the offline consumption field compared to its peers, and Baidu Robotaxi may achieve a single city break even point by 2025. In the coming quarters, the company's general artificial intelligence content is expected to achieve commercial monetization.
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