Core Insights - Black Creek has reduced its stake in Baidu at a significant time, as the stock experienced a 54% increase in Q3 2025 after years of stagnant trading [1] Company Overview - Baidu, Inc. is a prominent Chinese technology firm focused on internet search, digital marketing, and cloud services, leveraging AI capabilities and a large user base to provide integrated digital solutions [2] - The company serves businesses seeking digital marketing and cloud solutions, as well as consumers using its search and entertainment platforms [3] Financial Performance - As of November 11, 2025, Baidu shares were priced at $131.95, reflecting a 49.47% increase over the past year, outperforming the S&P 500 by 34.13 percentage points [3] - Black Creek's holding in Baidu decreased from 7.11% to 4.93% of its reported U.S. equity AUM, following a sale of 998,716 shares valued at $49.13 million, leaving 793,718 shares valued at $104.59 million at quarter-end [3][4] Investment Strategy - Black Creek's decision to sell Baidu shares is notable due to the 56% reduction in position size, marking the largest negative adjustment by percentage among its 28 stocks in Q3 [5] - Despite the reduction, Black Creek still retains 44% of its Baidu shares, indicating a potential strategy of profit-taking amid the stock's price increase [6]

Core Viewpoint - Baidu is launching new AI models to regain its competitive edge in the AI market, particularly focusing on reasoning capabilities and open-source strategies [1][2][9] Group 1: New AI Models - Baidu has introduced its first reasoning-focused AI model, ERNIE X1, which claims to match the performance of DeepSeek's R1 model at half the cost [4] - The new models are part of Baidu's strategy to catch up with competitors who have already released advanced AI models [5][6] Group 2: Competitive Landscape - Baidu's Ernie chatbot has struggled to gain widespread adoption, falling behind competitors like Alibaba and ByteDance [6][7] - Experts indicate that Baidu's slow innovation pace and reliance on proprietary models have hindered its competitiveness [5][7][8] Group 3: Shift in Strategy - Baidu is shifting towards an open-source model strategy, which contrasts with its previous proprietary approach [9] - This shift is seen as a response to the success of open-source models from competitors like DeepSeek, Alibaba, and Tencent [9] Group 4: Advantages and Future Outlook - Baidu maintains advantages due to its extensive user base and popular applications, which can support its AI initiatives [11] - The company possesses significant data resources, which are crucial for AI development, as highlighted by its CEO [12]