AI TRENDS | Baidu's AI Business Expected to Surpass Traditional Segments by 2026, Goldman Sachs Reports

Goldman Sachs has released a research report highlighting Baidu's accelerated growth in cloud business revenue, particularly in GPU-based cloud services, during the first quarter of this year. According to Jin10, the firm anticipates that Baidu's AI-driven business will grow by over 30% annually, primarily benefiting from a robust increase in AI cloud infrastructure, which is expected to exceed 50% year-on-year growth. By the end of 2026, AI-driven business contributions are projected to surpass those of traditional and other business segments. During an analyst meeting, Baidu's management revealed their target for cloud business growth to outpace the market and major competitors in the coming quarters. The company has observed a shift in token usage from training to inference, which aids in expanding Baidu Cloud's customer reach. Management also indicated that the current capabilities of the Wenxin Yiyan model are lagging, and future research and development will focus on revitalizing the model's capabilities, prioritizing the development of Wenxin Yiyan to boost MaaS (Model as a Service) revenue. Goldman Sachs forecasts a mid-term gross margin target of 35% to 40% for GPU cloud business, compared to 25% to 30% for traditional CPU and memory services. Management aims for AI-driven business to account for over 50% of total revenue, reducing the holding company discount through rapid growth in core cloud and chip revenue.