Decoding Baidu's All-Out AI Strategy: A Single Company for China's "GPU + ChatGPT + RoboTaxi"

1. Full Switch to "AI Company Baidu" with ERNIE 5.0

Baidu, originally a search engine company from Beijing, can no longer be simply described as "China's Google."
In November 2025, the company unveiled its next-generation large-scale model "ERNIE 5.0" and a detailed roadmap for its self-developed AI chips, redefining itself as an AI company on the global stage.aktiencheck.de

ERNIE 5.0 is reported to be a "native all-modal" model handling text, images, audio, and video with a single architecture, boasting a total of 2.4 trillion parameters and enhancing inference efficiency with a Mixture-of-Experts (MoE) structure.斯坦证券

On the user-voted evaluation site LMArena, it ranked second in the world in the text category, following Gemini 2.5 Pro, and first domestically, with Chinese media emphasizing its "world-class creative ability."新浪财经　banyuetan.org

Baidu has already been offering the model to consumers via ERNIE Bot and to businesses through the cloud MaaS "Qianfan," and this update is akin to a "complete brain overhaul."Stock Titan
The transformation from a search company to an AI platformer that vertically integrates models, chips, and applications has become more pronounced.

2. The Impact of M100, M300, and the "Million Chip Cluster"

It's not just about software. What caught investors' attention in this announcement was the depth of the AI chip strategy.

According to an article by Aktiencheck, Baidu plans to launch its self-developed chips, M100 in 2026 and M300 in 2027, reducing dependency on overseas GPUs while building an optimized computing infrastructure for massive multimodal AI.aktiencheck.de

And by 2030, they plan to establish a computing cluster bundling these chips on a scale of one million units.aktiencheck.de

Amid ongoing US-China tech tensions and tightening export restrictions on advanced GPUs to China, the "own chips + own model" framework symbolizes a move towards AI sovereignty within China.Facebook

On the other hand, the scale of one million units implies astronomical costs when considering power, cooling, and capital investment. Alongside the positive narrative of breaking away from NVIDIA dependency, concerns naturally arise about whether the investment burden might erode shareholder returns.

3. The Frontline of Implementation: Apollo Go and GenFlow 3.0

Symbolizing that "Baidu's AI strategy is not confined to the lab but is running in the streets" is the robotaxi business "Apollo Go."

In the latest announcement, Apollo Go has provided over 17 million fully autonomous rides across 22 cities worldwide, with weekly ride numbers exceeding 250,000.aktiencheck.de

With a driving distance of over 240 million kilometers, more than 140 million kilometers of which were fully unmanned, these figures place it on par with Waymo at the top of the global scale.PR Newswire

Expansion is progressing not only within China but also to Europe, the Middle East, and Hong Kong. Plans include starting full-scale operations by 2027 through a partnership with Swiss public transport company PostBus, and overseas expansion through collaborations with Uber and Lyft, transforming Baidu's robotaxi from a "Chinese local" to a "global mobility platform."Reuters　Reuters

Another pillar is the AI assistant "GenFlow 3.0." Updated in conjunction with ERNIE 5.0, it has already surpassed 20 million users. Combined with the no-code development tools MeDo/Miaoda, over 400,000 apps are said to have been created within this ecosystem.aktiencheck.de

Within China, a world akin to "WeChat mini-apps + AI agents" is quietly spreading.

4. Despite the Decline in Stock Price—What Investors Are Watching

Despite such flashy technological announcements, the stock market's reaction was lukewarm.

Following the launch of ERNIE 5.0, Baidu's stock temporarily plummeted nearly 10%, with overseas media reporting that "the latest model failed to fully convince cautious investors."ヤフーファイナンス

The Aktiencheck article also points out that Baidu's stock is about 16% down from its 52-week high, positioned at a "Moderate Buy" rating with a consensus target price of $131, representing a "midpoint between expectations and concerns."aktiencheck.de

The market is primarily concerned with the following three points:

1. How AI investments translate into revenue and profit
   In the earnings report scheduled for November 18, it will be the first substantial examination of how much AI Cloud, Apollo Go, GenFlow, and others have boosted the top line.aktiencheck.de

2. How much it can offset the slowdown in the advertising business
   With the Chinese economy slowing down, search and advertising revenues are said to be plateauing, and the focus is on how much AI-related sales function as a "second engine."Reuters

3. Regulatory and geopolitical risks
   The commercialization of autonomous driving is subject to government regulations in various countries. Additionally, while the self-developed chip route offers an advantage in avoiding US export restrictions, it might further deter overseas money cautious about investing in Chinese tech companies.Reuters

Despite clear technological advancements, the stock price isn't soaring because "the story is grand, but it hasn't yet been sufficiently reflected in the P&L (Profit and Loss Statement)," a common situation for growth stocks.

5. How Did Social Media React? The Temperature Gap Between Chinese Netizens and English-Speaking Investors

The announcement of ERNIE 5.0 also saw divided reactions on social media.

Chinese Social Media: A Dual Structure of Pride and Critical Reviews

On Weibo and IT blogs, many posts praised the technological achievements, such as "standing shoulder to shoulder with GPT-5 on LMArena" and "world's number one in creative ability," reflecting a sense of national pride that "finally, a Chinese large model has reached the top class globally."

On the other hand, more critical voices were heard from developers and individual bloggers who actually tried ERNIE 5.0.

• "The generation speed is slow, there's no HTML preview on the web version, and there's room for improvement in everyday use experience."360doc

• "The ranking is impressive, but the product still needs refinement. The detailed behavior of long-text generation and tool integration is particularly concerning."juejin.cn

In other words, "the technical potential is high, but the user experience is still in development" is the candid evaluation from the domestic Chinese community.

English-Speaking Investor Social Media: A Mood of Skepticism Until Earnings

On English-speaking X (formerly Twitter) and investor communities, headlines from tech media—"stock price plummets," "investors remain cautious"—were quoted,

• "Still in a downtrend on the chart. The AI event only provided a selling opportunity."

• "I don't want to take any more risks with Chinese stocks. I'll wait and see until the earnings numbers come out."

Such tones were prominent, aligning with overseas reports of the stock price plummet immediately after the ERNIE 5.0 announcement.ヤフーファイナンス

While those following tech news may evaluate Baidu as a comprehensive player capable of competing with OpenAI and NVIDIA, the market is wary of "China risk + massive CAPEX (capital expenditure)," and cautious about valuation expansion—such temperature differences are also evident on social media.

6. How to Evaluate Baidu's AI Strategy—Three Scenarios

Based on the information so far, let's consider Baidu's AI strategy from an investor's perspective, divided into three rough scenarios.

① Winning Scenario: Re-evaluation as a Comprehensive AI Platform

• ERNIE 5.0 becomes the "default large model" for domestic companies, and cloud sales continue to grow

• Apollo Go progresses in commercialization while clearing regulations in China, Europe, and the Middle East, expanding platform revenue

• Self-developed chips M100/M300 succeed, including external sales, and are evaluated as part of the "Chinese version of NVIDIA"

In this scenario, AI business boosts both sales and profits, with room for the current PER and stock price range to rise significantly.

② Patience Scenario: Technology Advances, but Profits Don't Follow

• Large-scale CAPEX and R&D expenses continue, long-term pressure on profit margins

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