Core Viewpoint - Baidu's Q2 financial report demonstrates a significant transformation in its AI business, marking a shift from a decade-long technology investment to a scalable monetization phase, with total revenue reaching 32.7 billion yuan and core net profit increasing by 35% year-on-year [3][4][6]. Financial Performance - In Q2, Baidu's total revenue was 32.7 billion yuan, with core revenue at 26.3 billion yuan and a net profit of 7.4 billion yuan, reflecting a 35% year-on-year growth [3][4]. - AI new business revenue surpassed 10 billion yuan for the first time, growing by 34% year-on-year [3]. AI Business Growth - Baidu's AI new business, including smart cloud services, is showing strong growth, with global ride-hailing service "Luobo Kuaipao" achieving over 2.2 million service instances in Q2, a 148% increase year-on-year [3][4]. - The cumulative global service instances for "Luobo Kuaipao" exceeded 14 million, covering 16 cities worldwide [3]. Technological Innovation - Baidu has adopted a more aggressive approach to technological innovation compared to competitors like Google, leading the market in smart cloud business growth and undergoing a comprehensive AI transformation in its core search business [4][20]. - The company has transitioned from incremental improvements to disruptive restructuring in its search business, with over 64% of search results generated directly by AI as of July [19][20]. Competitive Positioning - Baidu's strategy emphasizes long-term technological investment over short-term gains, allowing it to build significant barriers in the evolving tech landscape [5][39]. - The company is positioned as a leader in the AI public cloud market, maintaining the top spot for six consecutive years, with a 14.9% market share in the large model platform market as of 2024 [23][31]. Ecosystem Development - Baidu's full-stack AI strategy integrates chip, framework, model, and application layers, providing end-to-end solutions rather than just computational power [23][30]. - The company has established a robust ecosystem that supports AI applications, evidenced by partnerships with major enterprises like China Merchants and State Grid [30]. Future Outlook - Baidu is focused on creating a new "AI as a Service" model, with innovations in digital human technology and a commitment to redefining the search experience [41][44]. - The company's long-term vision is supported by a stable cash flow from its smart cloud services and the rapid expansion of "Luobo Kuaipao" in international markets [43][46].