On Monday, the Hong Kong-listed shares of Baidu BIDU took a nosedive by 7%, wiping out $2.4 billion from the corporate’s market worth. This sharp decline got here within the wake of the corporate founder’s noticeable absence from a pivotal assembly with President Xi Jinping.
What Occurred: President Xi had known as a gathering in Beijing with high Chinese language enterprise leaders, together with Alibaba BABA founder Jack Ma and Huawei’s Ren Zhengfei. Nevertheless, Reuters reported that Baidu’s founder, Robin Li, was not current on the assembly. The assembly with Xi was perceived as an indication of the federal government’s backing for China’s tech sector amid years of regulatory scrutiny and unsure U.S. relations.
In the meantime, Baidu introduced on Sunday, its plans to combine each DeepSeek and its proprietary Ernie giant language fashions (LLMs) into its search engine to offer a extra numerous search expertise following rival Tencent’s TCEHY declaration that they’d combine DeepSeek’s AI mannequin into WeChat search.
SEE ALSO: Xi Jinping And Jack Ma’s Upcoming Assembly ‘A Clear Message’ Of Beijing’s Help, Inventory Soars In Hong Kong Forward Of Earnings
Why It Issues: Final week, Baidu’s shares surged practically 12%, fueled by pleasure over China’s developments in AI and the sooner launch of DeepSeek R1. Seizing the second, the corporate unveiled an upgraded model of its Ernie AI bot and revealed plans to open-source its AI fashions. The latest losses are largely attributed to profit-taking following the AI-driven rally. The corporate can also be scheduled to launch its fourth-quarter earnings on Feb. 18.
Nevertheless, Li’s absence has led to hypothesis about Baidu’s waning affect out there. The corporate has been battling declining advert income, whereas its cloud division has skilled restricted development regardless of increasing its AI choices over the previous two years.
Baidu’s latest inventory market efficiency comes amid a broader context of the corporate’s efforts to remain aggressive within the AI market. Baidu is getting ready to launch its next-generation AI mannequin, Ernie 5.0, later this yr to compete with new entrants like DeepSeek.
Moreover, Baidu’s CEO has emphasised the significance of continued funding in AI, regardless of the cost-effectiveness of AI fashions like DeepSeek. On the World Authorities Summit in Dubai, Robin Li highlighted the necessity for extra funding to develop smarter fashions.
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