(Yicai) May 17 -- Baidu’s shares rose after the Chinese search engine and artificial intelligence behemoth said net profit in the first three months of the year surged from the prior quarter, buoyed by its AI business.

After climbing by as much as 5.2 percent in the morning, Baidu [HKG: 9888] ended the day 2.2 percent higher at HKD110.80 (USD14.20) a share. Its New York-listed stock [NASDAQ: BIDU] closed up 1.7 percent at USD112.59 yesterday.

Net profit soared 110 percent to USD755 million in the three months ended March 31 from the fourth quarter of last year, but fell 6 percent year on year, the Beijing-based company said in an earnings report released yesterday. Revenue was USD4.4 billion, down 10 percent quarter on quarter and up 1 percent from a year earlier.

Based on non-generally accepted accounting principles, Baidu's profit reached USD971 million, down 10 percent from the prior quarter and up 22 percent from a year ago.

“Baidu Core's online marketing revenue remained stable, while the end-to-end optimization of our AI technology stack continued to propel the growth of our AI Cloud revenue during the quarter," said Robin Li, co-founder and chief executive officer.

Net profit at the Baidu Core segment, which mainly provides online marketing services and non-marketing value-added services, surged 111 percent to USD713 million in the first quarter from the prior one, but fell 7 percent from a year ago. Its non-GAAP profit fell 12 percent quarter on quarter while jumping 26 percent year on year.

“Baidu Core's non-GAAP operating margin expanded both year-over-year and quarter-over-quarter to 23.5 percent,” said Chief Financial Officer Luo Rong. “We have established a track record of consistently improving operational efficiency.

“In the coming quarters, we will execute on what is needed to optimize our operational efficiency in support of our AI-enabled businesses and high-quality growth and maintain a healthy non-GAAP operating margin,” Luo noted.

Often called China's Google, Baidu has been investing heavily in AI research and development, releasing the first version of Ernie, its rival offering to ChatGPT, in 2019.

“As a new era of Gen-AI unfolds in China, foundation models like Ernie will serve as the underlying infrastructure, infusing various facets of people's lives,” Li noted. “We are making our Ernie family of models increasingly affordable and efficient.

“This should provide Baidu with even greater opportunities ahead,” he said.

Baidu recently launched several lightweight large language models to make Ernie more efficient and affordable, as well as three major development tools -- AgentBuilder, AppBuilder, and ModelBuilder -- to help developers and companies create intelligent agents, develop native AI applications and customize models.

Thanks to the mutual promotion of Ernie Bot and PaddlePaddle, the number of developers in the PaddlePaddle community reached 13 million in the middle of last month.

Baidu App's monthly active users rose 3 percent to 676 million in March from a year earlier. Apollo Go, Baidu's autonomous ride-hailing service, has served over 6 million people as of April 19, providing around 826,000 rides last quarter, up 25 percent from a year ago.

Editor: Martin Kadiev