Baidu’s Shares Slide in Reflection of Worsening China AI Battle

Baidu Inc.’s shares fell despite a surprise rise in quarterly revenue, reflecting concerns about intensifying competition in AI and a persistent economic downturn.

The company’s shares fell more than 4% in US trading. It reported a 3% rise in revenue for the March quarter to 32.5 billion yuan ($4.5 billion), when analysts expected a slight fall. But adjusted operating profit plunged 20%. Net income rose a stronger-than-anticipated 42%, though that was buoyed in part by investment gains.

Baidu benefited from demand for computing in the post-DeepSeek Chinese AI development boom, offsetting a decline in advertising. The unexpected overall revenue ...