(Yicai) Feb. 27 -- Baidu’s net profit plunged 65 percent in the fourth quarter last year from a year earlier as its traditional businesses contracted during the Chinese internet giant’s ongoing artificial intelligence transformation. But the company’s AI-related revenue reached an all-time high share of total revenue and is becoming a key income driver.

Baidu raked in net profit of CNY1.8 billion (USD255 million) in the three months ended Dec. 31, the Beijing-based firm said yesterday. Revenue tumbled 4 percent year on year to CNY32.7 billion (USD4.7 billion) but jumped 5 percent quarter on quarter thanks to the boost from its new core AI-powered business.

Revenue from Baidu’s AI-powered business surged 18 percent from the previous quarter to CNY11.3 billion (USD1.6 billion). It accounted for 43 percent of its general business revenue, a gain of 4 percentage points from the third quarter. Revenue from AI cloud infrastructure amounted to CNY5.8 billion, and that from AI applications and AI-native marketing services each came to CNY2.7 billion.

“2025 marked a pivotal year as AI became the new core of Baidu,” said Chairman and Chief Executive Officer Robin Li. “AI Cloud Infra gained strong momentum, with our differentiated full-stack end-to-end AI capabilities earning growing enterprise recognition. Our portfolio of AI applications continued to scale, addressing diverse needs across enterprises and individuals.”

“Apollo Go further reinforced its global leadership, operating at industry-leading scales while accelerating international expansion into new markets. Meanwhile, AI-native Marketing Services continued to grow, unlocking new possibilities for the long term,” Li added.

Apollo Go, Baidu’s autonomous ride-hailing service, completed 3.4 million fully driverless rides in the fourth quarter, with weekly rides peaking at over 300,000. As of this month, Apollo Go has served more than 20 million rides to the public, the company said.

Baidu announced in December last year that it is mulling spinning off its AI chip unit Kunlunxin Technology and listing it independently. The subsidiary quietly submitted its IPO application to the Hong Kong Stock Exchange on Jan. 1.

“The Kunlunxin spin-off and separate listing is progressing, which we believe will unlock significant value for shareholders,” Chief Financial Officer He Haijian said.

Baidu’s net profit plummeted 76 percent last year from the previous year to CNY5.6 billion (USD799 million), while revenue slid 3 percent to CNY129.1 billion (USD18.5 billion), according to its financial report.

Baidu’s Hong Kong shares [HKG:9888] closed up 0.2 percent today at HKD123.70 (USD15.80), after tumbling 4.3 percent yesterday. Its US-listed stock [NASDAQ:BIDU] slumped 5.7 percent to end the day at USD125.15 yesterday.

Editor: Kim Taylor