Today, we’re thrilled to sit down with Chloe Maraina, a Business Intelligence expert with a deep passion for transforming big data into compelling visual stories. With her sharp insights into data science and a forward-looking vision for data management, Chloe is the perfect person to help us unpack the evolving landscape of the Chinese tech industry, particularly Baidu’s promising trajectory. In this conversation, we’ll explore Baidu’s recent stock upgrade, the pivotal role of AI and cloud computing in its growth, the impact of China’s push for tech self-reliance, and the exciting potential of its in-house innovations. Let’s dive in.
Can you walk us through why Baidu recently received an upgrade to Overweight from Neutral by analysts, and what key factors are fueling this optimism?
Absolutely. The upgrade reflects a growing belief that Baidu is entering a transformative growth phase. Analysts are particularly excited about the company’s advancements in AI and cloud computing, which are seen as the new engines of revenue. Unlike its traditional advertising business, which has been a core focus for years, these emerging areas are gaining traction fast. The sharp increase in the price target—from $110 to $188—signals strong investor confidence in Baidu’s ability to capitalize on these high-growth sectors, especially as China prioritizes domestic tech development.
How are AI and cloud computing reshaping Baidu’s future compared to its legacy advertising business?
AI and cloud computing are becoming the cornerstone of Baidu’s strategy. While advertising has long been the company’s bread and butter, it’s facing headwinds with expected declines in the coming years. In contrast, AI and cloud services are projected to drive significant revenue growth, with cloud alone expected to jump 23% in 2025 and a whopping 61% in 2026. These technologies are not just supplementary—they’re redefining Baidu’s value proposition by offering scalable, high-demand solutions that align with global tech trends and national priorities in China.
Can you elaborate on China’s drive for technological self-reliance and how it’s creating opportunities for Baidu?
China’s push for tech independence is a game-changer for companies like Baidu. The government is heavily investing in domestic AI infrastructure and promoting homegrown innovation to reduce reliance on foreign technology. This creates a fertile ground for Baidu, as it positions itself as a leader in AI compute and cloud solutions. With supportive policies and a national focus on building robust tech ecosystems, Baidu can scale its next-generation technologies much faster, tapping into both public and private sector demand.
What makes Baidu’s Kunlun AI chips such a critical piece of its growth puzzle?
The Kunlun AI chips are a strategic asset for Baidu, especially in its cloud operations. These in-house chips are designed to power AI workloads efficiently, giving Baidu a competitive edge in delivering high-performance computing. Their adoption is growing among Chinese hyperscalers, telecom operators, and state-owned enterprises, particularly as U.S. export restrictions limit access to advanced foreign AI chips. This has amplified demand for domestic alternatives like Kunlun, positioning Baidu as a key player in China’s AI hardware landscape.
Analysts are projecting a massive surge in Baidu’s cloud revenue in the coming years. What’s behind these ambitious forecasts?
The projections—23% growth in 2025 and 61% in 2026—are driven by a combination of rising demand for AI-driven cloud services and Baidu’s aggressive infrastructure expansion. The company has deployed over 30,000 accelerators to support its own AI models and enterprise customers’ needs, which is a big factor. Additionally, there’s a clear trend of businesses in China seeking scalable cloud solutions for data processing and AI inference, and Baidu is well-positioned to meet that demand with tailored offerings.
Let’s talk about the impressive growth in GPU-based cloud subscriptions for Baidu. What does the 128% year-on-year increase in Q3 tell us about the market?
That 128% growth in Q3 is a loud signal of exploding demand for high-performance computing in China. Businesses are increasingly relying on GPU-based cloud subscriptions for tasks like AI model training and inference, which require substantial computational power. Baidu’s ability to deliver these services at scale shows it’s capturing a significant share of this market. Looking ahead, these subscriptions are expected to more than double by 2026, which could have a transformative impact on Baidu’s financials.
What’s your forecast for Baidu’s role in the AI and cloud computing space over the next few years?
I’m very bullish on Baidu’s trajectory in AI and cloud computing. Given the strong tailwinds from China’s tech self-reliance initiatives and the growing adoption of its Kunlun chips, I expect Baidu to solidify its position as a leader in these fields. The projected growth in cloud revenue, coupled with recurring income from GPU subscriptions, suggests that Baidu could become a dominant force not just domestically but also as a global contender in AI infrastructure. However, it’ll need to navigate competitive pressures and ensure it keeps innovating to maintain this momentum.
