Baidu's Chief Financial Officer, Haijian He, highlighted the company's successful transition into a full-stack AI player, with AI-related revenue now accounting for over 50% of its total revenue. This achievement underscores Baidu's integrated services offering and the strategic importance of its AI investments. He emphasized that the company's ability to build and operate AI infrastructure at scale, including its proprietary Kunlunxin AI chips, provides a significant competitive advantage and a new high-margin business.
During the Q1 2026 earnings call, Haijian He noted that GPU cloud revenue surged by 184% year-over-year, significantly outperforming the broader market. He explained that GPU cloud services are structurally higher-margin than traditional CPU cloud services due to stronger demand, tighter supply chains, higher technical barriers, and pricing power. AI applications also contribute to this high-margin profile, driven by sticky, subscription-based models and operational leverage. Baidu's AI-powered business, which includes AI Cloud Infra and AI applications, generated $2 billion (RMB 13.6 billion) in Q1 2026, marking 52% of Baidu General Business revenue.
Baidu's self-developed Kunlunxin AI chips further support margin expansion and cost optimization. Haijian He pointed out that these chips, part of Baidu's full-stack AI capabilities, enable the company to ensure stable compute supply, optimize end-to-end performance, reduce costs, and deliver cost-effectiveness to customers. The company's robotaxi business, Apollo Go, also showed strong momentum, delivering 3.2 million fully driverless rides in Q1. The CFO indicated that while robotaxis are still in an investment phase, the path to profitability is becoming clearer as operations scale, with break-even already achieved in Wuhan City. Overall, the shift towards higher-margin, faster-growing AI businesses, coupled with cost optimization and internal productivity gains through AI, is expected to drive compelling and sustainable margin expansion for Baidu.
