Baidu's second-quarter financial report for 2025 reveals a mixed picture, with total revenue amounting to 32.7 billion yuan, marking a 4% year-over-year decline and setting the lowest second-quarter record since 2023. Despite a 33% surge in net profit to 7.322 billion yuan, non-GAAP net profit saw a 35% drop. Core business revenue fell 2% year-over-year to 26.25 billion yuan, with online advertising revenue specifically plummeting by 15%. Amidst this, Baidu is aggressively driving the AI transformation of its search engine, witnessing a gradual rise in AI-generated content. However, this shift has squeezed the profit margins of its traditional advertising segment.

On a positive note, non-advertising business revenue, particularly from intelligent cloud services, soared by 34%, emerging as a standout in the financial report. Nonetheless, the intensified investment in AI has strained the company's short-term cash flow, resulting in a negative free cash flow of 4.7 billion yuan. Baidu acknowledges that AI commercialization is still in its nascent stages and vows to prudently manage its investment pace moving forward.