China-based Baidu credited growth in Q2 to improvements around advertising, an ongoing recovery in consumer spending and use of AI to boost search functionality.

On an earnings call, co-founder and CEO Robin Li claimed Baidu was in good health and on a solid footing for future growth.

Li said Baidu is using its ChatGPT-like Ernie Bot to enhance search, and improve, rebuild and create new offerings.

“We are determined to make Ernie the most popular foundation model in China”.

Li added Baidu improved its monetisation system by using generative AI to broaden advertising campaign keywords to user search queries.

It is now enabling advertisers to use AI to generate images and video with natural language.

He said generative AI is enhancing Baidu’s auction system to better match advertisements to search queries.

Baidu is awaiting approval for a large-scale deployment of the bot, he said.

Net income attributable to Baidu rose 43 per cent year-on-year to CNY5.2 billion ($687.6 million), with revenue up 15 per cent to CNY31.1 billion.

Online marketing revenue rose 15 per cent to CNY19.6 billion and offline advertising revenue 12 per cent to CNY6.8 billion.

AI cloud sales increased 5 per cent to CNY4.5 billion.

Revenue from its video streaming platform iQIYI grew 17 per cent to CNY7.8 billion, with average daily subscribing members up 13.1 per cent to 111.2 million,

Monthly active users (MAUs) of the Baidu app grew 8 per cent to 677 million.

Operating costs grew 32 per cent to CNY6.3 billion, primarily due to an increase in channel spending and promotional marketing expenses.

R&D expenses remained at CNY6.4 billion.