(Yicai) Nov. 22 -- Although Baidu has stockpiled enough chips to ensure that it can continue to update its large language model over the next one to two years, the US ban on chip exports will be a drag on artificial intelligence progress in the long term, and so the Chinese internet behemoth is actively looking for alternatives, Chief Executive Officer Robin Li said.

Baidu, which launched its chatbot Ernie Bot 4.0 last month, does not need chips with too much computing power, Li said at an analyst conference after the Beijing-based firm’s earnings call yesterday. Baidu’s four-layer architecture and algorithmic strengths will also help improve efficiency and mitigate the impact of these challenges.

Rival Tencent Holdings placed orders early, so it has a high inventory of chips to support several generations of upgrades to its LLM Hunyuan, an executive at the tech heavyweight said not long ago. The Shenzhen-based company’s cloud capabilities will not be affected by the chip ban.

“Moving forward, while Baidu will continue prioritizing investments in AI, especially in generative AI and foundation models, we will do so with an unrelenting focus on efficiency and strategic resource allocation,” said Chief Financial Officer Rong Luo. 

Ernie Bot 4.0, which was opened to the public in the third quarter, has garnered 70 million users so far. On the Baidu search engine, some 640,000 creators have produced 14 million pieces of content using AI-assisted creation tools. And over 30 million people have used the new AI function offered by Baidu Wenku, the company's document and e-book sharing platform.

Baidu set up a science and technology ethics committee in October to guide the practice of science and technology professionals.

Improved Performance

Baidu turned a profit in the third quarter, after making a loss the same time last year, thanks to improved performance in its core online advertising business and video streaming platform iQiyi, according to its third-quarter financial report released yesterday. This is despite the higher expenditure on research and development to roll out Ernie Bot.

Baidu raked in net profit of CNY6.7 billion (USD938.6 million) in the three months ended Sept. 30, compared to net losses of CNY146 million (USD20.5 million) in the same period last year, according to the report. Revenue climbed 6 percent to CNY34.4 billion (USD4.8 billion).

Revenue from Baidu Core, which mainly provides online marketing services and non-marketing value-added services, advanced 5 percent to CNY26.6 billion (USD3.7 billion) over the period, while earnings from iQiyi soared 17 percent to CNY8 billion (USD1.1 billion). The company’s R&D expenses climbed 6 percent to CNY6.1 billion.

Baidu’s stock price in Hong Kong [HKG: 9888] was trading up 5.1 percent at HKD112.90 (USD14.50) as of 12 noon today. Its US-traded shares [NASDAQ: BIDU] closed up 1.9 percent at USD113.42 yesterday.

Editors: Shi Yi, Kim Taylor