Market Value of Baidu Drops $2.4 Billion Due to CEO’s Absence from Critical Event
On a recent Monday, the stock prices of Baidu, a well-known tech giant in Hong Kong, plummeted by 7%, resulting in a substantial $2.4 billion loss in the company’s overall market value. The sharp decline occurred after the conspicuous absence of the company’s founder, Robin Li, at a crucial meeting with President Xi Jinping in Beijing.
This significant meeting convened by President Xi included other prominent Chinese business leaders, such as Jack Ma of Alibaba and Ren Zhengfei of Huawei. Reuters reported that the absence of Baidu’s founder, Robin Li, from this meeting raised eyebrows in the financial world. The meeting was seen as a demonstration of government support for China’s tech sector, particularly in the face of ongoing regulatory scrutiny and unpredictable U.S. relations.
In an attempt to stay competitive and maintain market relevance, Baidu announced plans to integrate its DeepSeek and Ernie large language models into its search engine. This move aimed to enhance the search experience for users and was a response to Tencent’s decision to integrate DeepSeek’s AI model into WeChat search.
The recent spike in Baidu’s shares, a nearly 12% increase last week, was driven by excitement surrounding China’s advancements in AI and the launch of DeepSeek R1. Capitalizing on this momentum, Baidu introduced an improved version of its Ernie AI bot, along with intentions to make its AI models open-source. However, the subsequent stock decline was primarily due to profit-taking following the AI-driven surge, as investors sought to capitalize on the gains.
Despite these recent developments, concerns have arisen about Baidu’s diminishing influence in the market, as the company faces challenges such as declining ad revenue and limited growth in its cloud division. Additionally, doubts linger about the company’s ability to compete effectively in the AI market, given the evolving landscape with the emergence of new players like DeepSeek. Baidu is gearing up to launch its next-generation AI model, Ernie 5.0, later this year to maintain its competitiveness and innovation edge in the industry.
Baidu’s CEO has been vocal about the importance of continued investment in AI technologies, emphasizing the need for smarter models to drive future growth and success. Speaking at the World Government Summit in Dubai, Robin Li highlighted the significance of ongoing investment in developing cutting-edge AI solutions to remain at the forefront of the industry. The company’s commitment to innovation and strategic advancements in AI reflects its dedication to remaining a key player in the tech sector.
