Chinese search engine giant Baidu on Wednesday reported better-than-expected fourth-quarter revenue, thanks to growth in its advertising, cloud computing and artificial intelligence businesses.
Revenue for the fourth quarter came in at 33.08 billion yuan ($4.79 billion), beating analysts' estimates of 32.01 billion yuan.
Baidu's core business, which includes search-based ad sales, cloud products and autonomous driving programs, saw revenue fall 1% to 25.7 billion yuan. Its Apollo Go self-driving taxi service provided 561,000 rides in the fourth quarter, up 162% from a year ago.
Revenue from online marketing fell 6% to $18.1 billion, while revenue from non-online marketing grew 11% to $7.6 billion, driven by its artificial intelligence and cloud businesses
The company is spending $23.3 billion on research and development for the full year 2022, equivalent to 18.8% of revenue.
During the earnings call, Baidu CEO Robin Li said its ChatGPT-like product, Ernie Bot, will first be embedded in Baidu's search engine and later be integrated into its smart car operating system, smart speakers and cloud products. Earlier this month, the company said that it will complete internal testing of Ernie Bot in March before making the service public.
The CEO added that more and more companies are realizing that generating large language models will transform their industries and they are looking to partner with Baidu.
The ChatGPT frenzy has swept China's tech industry, and major firms are racing to roll out competing products. Baidu, a major AI player in the country, has given a high priority on this business.
"We were able to further improve efficiencies or reallocate some resources to support new initiatives like Ernie Bot," said Rong Luo, Baidu's chief financial officer, on the earnings call. According to the company, it has been cutting costs and expenses since the end of 2021, and some businesses that lacked competitive advantages or were unprofitable for a long time were scaled back or phased out in recent quarters.
The company also announced a $5 billion share buyback on Wednesday.