ChatGPT is trending, and the capital market is revaluing Baidu's value!

ChatGPT is popular in China, although most people can't experience it.

Simply put, ChatGPT is an intelligent chat software that draws the world's attention because the questions answered are too precise and personified.

Looking at it now, ChatGPT can write essays, code, and create novels. After iteration in the future, I'm afraid there will still be many things it can do.

Immediately after ChatGPT became popular, Microsoft announced an additional billion dollars and plans to include it in office and cloud computing to improve the level of product intelligence.

Google and Baidu can't wait to announce that they are also developing functions similar to ChatGPT. Baidu even announced that it will be included in Baidu search in March of this year. As a result, Baidu is known as the Chinese version of ChatGPT, and its stock price has soared for 2 consecutive days.

In fact, the impact of ChatGPT with humans was a bit like Google's AlphaGo defeating the world chess king Li Shishi back then, except that artificial intelligence was just beginning at the time, and it didn't bring any practical use. Currently, ChatGPT developer OpenAI has generated tens of millions of dollars in revenue.

The epoch-making significance of ChatGPT is that artificial intelligence is beginning to revolutionize the way humans obtain information. In the future, Baidu Search and Google Search will face challenges.

The success of ChatGPT depends on a large amount of data and computing power, and Baidu is undoubtedly the most likely company to launch the Chinese version of ChatGPT.

In fact, as early as 2017, Baidu began all-in AI. The Apollo autonomous driving technology it developed was leading in China. By the end of 2021, the Apollo partner network had grown to more than 30 automobile brands, including automobile manufacturers such as GM, Ford, Honda, and Great Wall.

In addition, Baidu's Radish Express has become the world's largest driverless car service provider. In the third quarter of 2022, Radish Express supplied more than 474,000 orders for driverless travel services, an increase of 311% over the previous year and an increase of 65% over the previous month.

Judging from financial data, since revenue from the AI business is still low, Baidu does not separately list revenue from autonomous driving. As a result, the market has always depreciated Baidu, believing that its traditional search business has stalled, yet all in AI has been unable to generate truly meaningful revenue.

But actually, Baidu is quietly turning around.

Judging from the business division, Baidu is only divided into online marketing services and other businesses. In the third quarter of last year, online marketing service revenue was 19.04 billion yuan, down 5.3% from the previous year, while other revenue from businesses including smart cloud, smart devices, and autonomous driving was 12.6 billion yuan, an increase of 16% over the previous year:

Looking at it over a longer period of time, Baidu's share of revenue from other sources has increased from 0% in 2010 to 38.7% in the third quarter of last year:

To be honest, Baidu's traditional online marketing service revenue has indeed lost growth, and with the development of short videos, there is a risk that its advertising revenue will decline.

The advent of ChatGPT is likely to save Baidu's core search business. In addition to its many years of deep AI cultivation, the Chinese version of ChatGPT is most interesting to Baidu, and it depends on whether Li Yanhong can fight for strength.

Another important reason Baidu got involved in the ChatGPT concept and triggered a sharp rise in stock prices was its low valuation.

Since Baidu collectively made large investment profits and losses last year, net profit declined sharply, so using the price-earnings ratio can truly reflect the current valuation level, and the market sales ratio is more appropriate.

Currently, Baidu's market sales ratio is only 2.9 times, which is close to an all-time low: