On September 1, 2026, Baidu's Hong Kong listing converted from secondary to dual-primary status, and the company told investors its AI business is close to breaking even. Read alongside the second-quarter numbers, these two signals point to the same conclusion: Baidu has stopped treating search advertising as its growth engine. For an overseas brand deciding whether and how to spend on Baidu, that single fact matters more than any new feature announcement.
The dual-primary listing is a capital signal, not just paperwork
The Hong Kong conversion took effect on September 1 with no new share issuance and no fundraising. Its practical consequence is access: a primary listing in Hong Kong opens a path to southbound Stock Connect, which lets mainland investors buy the shares directly. Baidu's CFO also told media the company holds roughly $40 billion in cash and short-term investments — more than its market value — and that it has approved a $5 billion buyback plus its first-ever dividend, with a separate listing for its Kunlun chip unit in progress.
None of that changes how the ad platform works. What it changes is the message to the market: Baidu now wants to be valued as an AI company, not a search-advertising company. When a platform's own leadership stops describing the legacy ad business as the future, advertisers should take note.
Nine straight quarters of ad decline is the real headline
The second-quarter results make the trend hard to ignore:
- Online marketing revenue was RMB 13.1 billion (about $1.8 billion), down 19% year over year.
- That is the ninth consecutive quarter of year-over-year decline.
- Baidu App monthly active users fell from 735 million to 644 million in a year — roughly 91 million users gone.
- By contrast, Tencent's marketing services grew 22% in the same quarter.
Baidu's own executives explain part of the decline as deliberate: the company is pushing AI search and "deliberately holding back" on monetizing it in the near term. In plain terms, Baidu is trading short-term ad revenue for a better AI-search product, on the assumption that the ad model will be rebuilt on top of it later.
AI revenue is now half of Baidu — but it is not coming from ads
AI-related revenue reached RMB 12.5 billion (about $1.7 billion), up 25% year over year, and has now been over half of core revenue for two straight quarters. That sounds like a smooth handover, but the composition matters:
- Cloud infrastructure was the largest piece at RMB 7.3 billion, up 50%, with GPU cloud growing 283%.
- AI applications were RMB 2.5 billion, up only 3%.
- AI-native marketing was RMB 2.6 billion, roughly flat.
The growth is being driven by selling compute and infrastructure, not by consumer-facing apps or by AI advertising. For a brand, this means the AI layer on Baidu is still young as a place to reach customers. The monetization engine has not been built yet — and Baidu says it is in no hurry to build it.
What this means for overseas brands
There are two ways to read these numbers, and they lead to opposite decisions.
The pessimistic read: Baidu search is shrinking, users are migrating to AI tools, and ad inventory on the classic search page is becoming "traditional advertising." Why invest in a channel that has declined for nine quarters?
The realistic read: Baidu still reaches hundreds of millions of users, and for B2B and high-intent categories, search remains one of the few places where a buyer is actively asking for a supplier. The change is not that Baidu is dead — it is that the way users encounter your brand on Baidu is shifting from blue links to AI answers.
The obstacle for overseas brands is the same as it has always been, but it is now sharper: you need a local entity and local expertise to open and run a Baidu account, and you now also need to be visible in the AI-answer layer that sits on top of search. Most international brands are not set up for either.
How overseas brands should reallocate their Baidu spend
The nine-quarter trend does not mean "stop advertising on Baidu." It means stop treating Baidu as a keyword-only channel. Three things should shift:
- Keep high-intent search ads where they still perform. B2B, industrial, and high-ticket categories still get qualified leads from search, because the buyer is searching with intent.
- Build AI-visibility assets in parallel. The same buyer who skips the blue links is asking an AI assistant for supplier recommendations. If your brand is not structured and cited across authoritative sources, you are invisible in that layer.
- Treat the platform as a moving target. Baidu is rebuilding search around AI while holding back monetization. A partner who only runs keyword campaigns is optimizing yesterday's surface.
For a brand entering China without a local entity, the practical question is who can open the account, run the campaigns, and — increasingly — get the brand cited in the AI layer. That is the part Baidu does not do for you.
The listing change and the nine-quarter decline are two views of the same shift: Baidu is no longer a search-advertising company in its own eyes. Overseas brands should stop planning their China entry as if it still were one.