Core Insights - Baidu's development in the AI sector continues to deepen, with a strategic focus on transforming its products using AI [2][7] - In Q2 2025, Baidu reported total revenue of 32.713 billion yuan, a year-on-year decrease of 3.59%, while net profit attributable to Baidu increased by 33% to 7.322 billion yuan [3][4] Financial Performance - Baidu's Q2 total revenue reached 32.713 billion yuan, down 3.59% year-on-year, while net profit attributable to Baidu was 7.322 billion yuan, up 33% [3][4] - Non-GAAP net profit attributable to Baidu was 4.795 billion yuan, a decline of 35.17% year-on-year [3] - The company’s operating profit improved due to a shift towards high-value products, indicating potential for further profit margin enhancement in the future [4] AI Business Growth - AI-driven new business revenue exceeded 10 billion yuan for the first time, growing by 34% year-on-year, with intelligent cloud revenue increasing by 27% [6][8] - The autonomous driving service Apollo Go provided over 2.2 million fully driverless rides in Q2, marking a 148% year-on-year increase and solidifying its position as a leading provider in China and globally [6] Cloud Services - The enterprise cloud segment is a major growth driver, with subscription-based revenue accounting for over half of total revenue and growing at over 50% year-on-year [3][8] - Baidu plans to gradually reduce project-based revenue in favor of a more stable subscription-based revenue model [8] Strategic Adjustments - Baidu is adjusting its agency model by eliminating exclusive agency mechanisms in several cities, transitioning to a service provider model, which may lead to short-term revenue declines but is seen as a necessary strategic shift [5] - The company is focusing on improving internal efficiencies and resource coordination to mitigate short-term impacts while maintaining a long-term commitment to AI investments [5] AI Search Transformation - Baidu is aggressively transforming its search products using AI, with over 50% of mobile search result pages containing AI-generated content, which increased to 64% by July [7] - Early tests for AI search monetization have begun, with a cautious approach to ensure user experience is prioritized [7]