Baidu CFO Henry He said the company’s AI revenue, including cloud computing and applications, now accounts for more than half of sales and could soon generate profit margins comparable with its legacy search business. He said stronger demand for AI cloud services and chips is supporting the outlook, while new GPU clusters could pay for themselves within two to three years. Baidu expects cloud revenue to grow faster than the industry average over the next few quarters while keeping capital spending below market expectations. The company faces competition from Alibaba, Tencent, ByteDance, Moonshot and other open-weight AI developers as advertising revenue declines. Baidu has secured primary listing status on the Hong Kong Stock Exchange and is pursuing an independent listing for its Kunlunxin AI chip unit, alongside a $5 billion share repurchase program and its first dividend policy. The company reported second-quarter revenue of 31.3 billion yuan, down 4% from a year earlier and below the 31.5 billion yuan analyst estimate cited in the report. An earlier account described second-quarter AI revenue as RMB 12.5 billion, or 50% of total revenue, and GPU infrastructure payback as improving from five to six years to two to three years; the reporting periods and figures are not reconciled here.