China's Baidu Inc. recently announced its fourth-quarter revenue for 2022 on Wednesday, Feb. 21. The company's advertising, cloud, and artificial intelligence (AI) portfolios grew at a faster rate than anticipated.

According to Refinitiv data, the Beijing-based company, which derives most of its revenue from online advertisements, reported 33.08 billion yuan ($4.80 billion), exceeding analysts' expectations of 32.01 billion yuan.

A snapshot from the Washington Post reveals that Baidu announced a net income of $1.97 per share. Adjusted for one-time gains and expenses, earnings per share amounted to $2.21.

AI, Cloud Services Push Baidu Revenue Stream

Reuters reports that revenue from Baidu Core decreased by 1% to reach 25.7 billion yuan. This includes search-based ad sales, cloud offerings, and autonomous driving initiatives.

The growth of the company's AI and cloud businesses was the primary contributor to the 11% increase in non-online marketing revenue, reaching 7.6 billion yuan.

A Baidu spokesperson stated in early February that the company plans to complete internal testing of generative AI technology in March before making the AI tool available to the public. The promising project is dubbed Wenxin Yiyan or Ernie Bot.

Nevertheless, pandemic-related controls in China caused a decline of 6% in Baidu's online marketing revenue during the quarter, bringing it to a total of 18.1 billion yuan.

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Robin Li, the chief executive officer of Baidu, described 2022 as a challenging year but expressed optimism that the company's revenue growth would resume in 2023. The company also announced a new $5 billion share repurchase program.

"With our long-term investments in AI, we are poised to capitalize on the imminent inflection point in AI, unlocking exciting new opportunities across our entire business portfolio," the Baidu CEO added.

Baidu and Its Ernie Bot Project

Baidu's research and development expenses for 2022 totaled 23.3 billion yuan, or 18.8% of revenue, as the company planned to integrate its Ernie Bot into its core businesses, such as its search engine, cloud, and smart cars. 

Ernie Bot, Baidu's AI-driven chatbot, will complete internal testing in March and be integrated into Baidu's search engine for the first time.

Aurora Mobile Limited, a Chinese marketing technology company, recently announced that it had joined the ecosystem of ERNIE Bot. The organization will integrate ERNIE Bot and Baidu's intelligent dialogue technology into its customer engagement and marketing technology offerings.

"The generative large-language model we are working on right now will be more suitable in the Chinese language and to the Chinese market than models developed overseas," Li said.

Many consider the chatbot to be at the forefront of China's efforts to develop an alternative Microsoft-backed OpenAI platform. According to Li, the Ernie Bot developers were making every effort to release the chatbot as soon as possible.

"The Chinese AI market is on the verge of experiencing explosive growth in demand, releasing unprecedented and exponential commercial value," he said.

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