BIDU · Forward model · AI Applications · Bear case
What has to happen in AI Applications
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AI Applications
Basis quarter$368M
Final quarter$495M
Implied CAGR+6%
Final revenue mix8%
Consumer and productivity AI that Baidu already charges for: Wenku, Baidu Drive, the DuMate agent, and the AI features layered onto them. It grew 3% year over year in Q2 2026, which is the quietest number in the AI table and the one that decides whether Baidu owns an AI platform or merely rents out the compute underneath other people's.
Last four quarters
2025 Q3
$383M
Estimated
2025 Q4
$398M
Estimated
2026 Q1
$368M
Estimated
2026 Q2
$368M
Estimated
Baidu Wenku (documents)Baidu Drive (storage)DuMate agent, consumer and enterprise editionsGenFlow and AI feature subscriptions
Sequential growth
+3.0%/qtr
decaying toward +2.5%
3% a quarter, about 13% a year, against the 3% year-over-year just delivered. The premium is the enterprise DuMate launch converting.
AI Applications
Latest: $495M (2031Q2E)
| Period | Value |
|---|---|
| 2025Q1 | $368M |
| 2025Q2 | $368M |
| 2025Q3 | $383M |
| 2025Q4 | $398M |
| 2026Q1 | $368M |
| 2026Q2 | $368M |
| 2026Q3E | $375M |
| 2026Q4E | $381M |
| 2027Q1E | $388M |
| 2027Q2E | $394M |
| 2027Q3E | $400M |
| 2027Q4E | $407M |
| 2028Q1E | $413M |
| 2028Q2E | $419M |
| 2028Q3E | $425M |
| 2028Q4E | $431M |
| 2029Q1E | $438M |
| 2029Q2E | $444M |
| 2029Q3E | $450M |
| 2029Q4E | $456M |
| 2030Q1E | $463M |
| 2030Q2E | $469M |
| 2030Q3E | $476M |
| 2030Q4E | $482M |
| 2031Q1E | $488M |
| 2031Q2E | $495M |
Assumptions & reasoning
- RMB 2.5B for three straight quarters. Rounded to one decimal place, this line has not visibly moved in a year, and Baidu's own YoY figure of +3% confirms it is close to flat.
- The one disclosed leading indicator is engagement, not money: AI DAU penetration across Wenku and Drive rose 27.4% year over year in June 2026. Usage is growing roughly nine times faster than revenue, which is either a monetisation opportunity or a monetisation problem.
- 3% a quarter is about 13% a year - ahead of the 3% just printed, on the view that agent products launched in mid-2026 start converting. If they do not, this line is worth roughly what it is worth today and nothing more.
- High margin and almost no capex: this is software running on infrastructure already paid for by the cloud line above.