Baidu Curbs Spending on Food Delivery to Prep for AI
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Baidu’s move to slash spending on services from food delivery to travel helped the search giant soundly beat estimates, as it recovers from Chinese government restrictions and prepares to invest more in artificial intelligence.
China’s largest search engine reported a better-than- projected 83% leap in net income after both general and traffic acquisition costs shrank. It’s also considering a change in its operating structure to allow a rapidly growing finance unit — a source of concern to Moody’s Investors Service, among others — operate more independently.
Baidu forecast revenue for the third quarter of 23.1 billion yuan ($3.4 billion) to 23.8 billion yuan, versus the 23 billion yuan average of analysts’ estimates compiled by Bloomberg. Net income soared to 4.4 billion yuan in the June quarter, sharply outpacing projections for 2.9 billion yuan.
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