Baidu: US Chip Curb Has Minimal Short-Term Impact on Our AI Model Development

BEIJING, February 29 (TMTPost)-- Baidu Inc played down the ongoing semiconductor restrictions imposed by the United States while highlighting progress in monetizing artificial intelligence (AI) technoogy.

Credit：TMTPost

“In the near term, the impact is minimal for our model development or product reinventions or monetization. As I mentioned last quarter, we already have the most powerful foundation model in China, and our AI chip reserve enables us to continue enhancing Ernie for the next one or two years. And for model inference, it requires less powerful chips. Our reserve and the chips available on the market are sufficient for us to power many AI-native application for end users and customers,” Baidu CEO Robin Li replied to a question about impact on the company’s AI development after the recent further chip restriction from U.S. at an earnings conference on Wednesday.

In the long run, Li cautioned Baidu may not have access to the most cutting-edge graphics processing units (GPUs) , but noted the user experience will not be compromised due to the most efficient homegrown software stack. “There's ample room for innovation in the application layer, the model layer, and the framework layer,” Li said. “Our end-to-end self-developed four-layer AI architecture, along with our strong R&D team, will support us in using less advanced chips for efficient model training and inferencing. This provides Baidu with a unique competitive advantage over our domestic peers.”

Asked about the technology road map of Baidu’s foundation model Ernie for the year 2024, Li disclosed the chips that his company has on hand should enable it to advance Ernie Bot 4.0 to the next level. Li reiterated Baidu will take an application-driven approach to inference Ernie and let users and customers tell it where we should improve and adjust for models. He said Baidu could be building multi-modalities, agents increasing reliability for its models.

Li introduced AI related development that Baidu has achieved in the fourth quarter of 2023. In December, about 26,000 enterprises are actively using Ernie through API on a monthly basis, increasing 150% quarter over quarter (QoQ). And Ernie is now handling more than 50 million queries every day, up 190% QoQ with a significant rise in third-party costs.

Since the second quarter last year, Baidu has actively utilized Ernie to revolutionize its products and services, creating AI native experiences and recently began to generate incremental revenues from Ernie and Ernie Bot. In the fourth quarter, Baidu earned several hundred million yuan, primarily from ad technology improvement and helping enterprises build their own models.

Revenue from Generative AI (GenAI) and foundation model represents 4.8% of Baidu’s AI cloud revenue in the fourth quarter. The increasing demand for model building played a significant role in this accelerated revenue growth, along with increasing distributions from inference. We have seen a growing number of enterprises, in particular, tech companies turning to our public cloud to build their models. Additionally, the AI cloud revenue generated by Baidu Core, other business groups, such as the mobile ecosystem group and the intelligent driving group, was about RMB 2.7 billion in the fourth quarter.

Within the Q4 internal cloud revenue, GenAI and foundation model accounted for about 14%. On a combined basis, the total internal and external AI cloud revenue was RMB 8.4 billion in Q4, with GenAI and foundation model contributing around RMB 656 million.

Baidu believes real applications are essential to unleashing the full business potential of Ernie and Ernie Bot. As one of the key highlights in Baidu's AI-native application, Baidu Wenku, equipped with an AI co-pilot, has become a platform for users to create content in a wide range of formats, helping them express their ideas. In addition to summarizing, creating, and expanding content, users particularly appreciate by Baidu Wenku's features for assisting them in automatically turning their inspiration into PowerPoint. We have been consistently improving and enriching its AI features.

Baidu's AI chatbot can help merchants increase productivity. Currently, about 4,000 merchants are using its AI chatbots, particularly in healthcare, education, travel, legal, B2B, and auto, where users often interact with merchants to learn about their offerings before making purchasing decisions. Baidu believes the GenAI-enabled search will help increase user intention on Baidu, reinforcing its position as the primary entry point for users seeking information and services. We are also expanding the reach of Ernie by enabling enterprises to easily divest AI-native application on Ernie.