The wave of AI models, catalyzed by ChatGPT, has stirred up quite a storm in various sectors over the past two yearsAs artificial intelligence continues to permeate everyday life, one of the most accessible integrations for the average user seems to be through AI-driven search functionalities.

Companies like Baidu, 360, Douyin (TikTok’s Chinese counterpart), Kuaishou, Tencent, Alibaba, and emerging startups are all eagerly vying for a piece of the AI search pie, pushing the commercial landscape of AI search to evolve rapidly.

Who Still Uses "Baidu Search"?

As we approach 2025, the question arises: is Baidu still your go-to search engine?

Recently, Baidu unveiled its financial report for the third quarter of 2024, revealing total revenues of 33.6 billion yuan, marking a 3% decline year-on-year—the company’s most significant drop in over two years.

Within this report, the online marketing sector, heavily reliant on advertising services, remains Baidu's primary revenue stream, generating 18.8 billion yuan in the third quarter, down 4% from last year

This decline is not new; Baidu's advertising revenues have faced pressures in recent years.

The downturn can be partially attributed to macroeconomic conditionsDolphin Investment Research indicated that the overall advertising industry is also experiencing sluggish growthHowever, what's critical to note is the double challenge confronting traditional search engines like Google and Baidu: they must contend with the rise of alternative content platforms and AI-powered search functionalities.

According to statistics from Statista, as of May 2024, while Baidu still leads the Chinese search market, its market share has plummeted to 55.85%, compared to a staggering 86.82% in November 2021.

The rise of content platforms such as WeChat, Douyin, and Xiaohongshu has given users more diverse options for information retrievalAn advertising industry insider recounts, "For immediate queries, Baidu is still the choice, but for more specialized searches, I turn to relevant apps instead." Often, users resort to apps like DazhongDianPing (a restaurant review app), Meituan (a local services app), and Xiaohongshu for tailored needs, showcasing a shift in user behavior.

AI search engines are also biting into Baidu’s market share

• U.S. Key Data Released: Is December Rate Cut Inevitable?
• Biotech Explores Funding Options Beyond Deals
• Why the Dollar Is Bucking the Trend of Rate Cuts
• ECB Rate Cut Warnings Mount
• Layered Computing Drives Industry Consolidation

Observers analyzing the situation have noted three factions: the 'supporters,' who embrace AI search outright; the 'opponents,' skeptical of AI's accuracy; and the 'neutral parties,' who blend both AI and traditional searches to meet their needs.

The 'supporters' have almost completely transitioned to AI-driven search solutionsTake, for instance, a UX designer in Beijing, pseudonymously named Shitou, who has abandoned traditional search enginesFor him, AI search engines deliver direct answers more efficiently“Baidu forces me to sift through materials for information, whereas AI gives me straightforward answers.” His reliance on Baidu has diminished significantly to mundane tasks like identifying scam calls.

On the flip side, the 'opponents' worry about the reliability of AI-generated answersSelf-media expert Xiao Cao recounts a concerning experience where AI misrepresented a company's financial data due to a date error

Using AI for data compilation now makes him cautious, reverting to Baidu for thorough information searches.

Then, there are the 'neutral parties' who combine both approachesFor instance, a project manager named Vivian blends AI and traditional search methods to enhance her work efficiency by cross-referencing data and ensuring factual reliability.

The AI Search Landscape: A Competitive Battlefield

Baidu is not sitting idly; it has been actively incorporating AI technologies to improve its search functionalityIn fact, following the meteoric rise of ChatGPT, Baidu was among the swiftest to respond with its own large language model, "Wenxin Yiyan." Currently, over 20% of search results generated by Baidu utilize AI, with around 70% of its monthly active users engaging with AI-generated content through the Baidu app.

In September, to commemorate the one-year anniversary of the Wenxin Yiyan app, Baidu announced its rebranding to “Wenxiaoyan,” positioning it as the new "smart assistant" alongside Baidu Search

This evolution reflects a dual approach, integrating traditional functionalities with enhanced AI-driven assistanceFor instance, Wenxiaoyan aims to provide more native AI experiences, answering users’ queries through a diverse range of media like icons, music, weather updates, and restaurant recommendations.

Despite Baidu's early lead in AI searches, the competitive landscape remains fierce, with major firms innovating rapidlyDouyin’s AI search retains a distinctive user-friendly approach, focusing on casual queries that resonate with its audience, while Kuaishou embeds AI summaries and related short video content into its search process to enhance user experience.

Alibaba’s AI search endeavor, the "Xinliu APP," boasts a stronger academic focus, offering users rapid document analyses and summarizations, effectively catering to more niche audiencesMeanwhile, Tencent has established the IMA platform, intertwining a search engine with broader applications for text processing and editing, linking to various online resources, including WeChat content.

Even the crucial players are racing to establish their dominance

Zhou Hongyi of 360 launched AI search products along with a subscription service, encompassing a range of multi-modal functionalities aimed at enhancing user engagementRecently, they introduced “Nano Search,” which aims to redefine search experiences relative to Baidu, Alibaba’s Quark, and others.

Among newer entities, a startup named "Yue Zhi An Mian" has emerged as a noteworthy contenderHaving launched recently, their AI tool "Kimi" allows users to simplify complex reports into digestible summaries, significantly cutting down reading time—a capability recognized and appreciated by many users.

As the landscape evolves, there remains a pressing need for AI-driven search functionalities to become monetarily sustainableThe user experience appears to be improving, making AI search integral to work and lifeYet, the challenge lies in translating this utility into profitability.

To effectively monetize AI search, businesses look toward subscription models for consumer-oriented services while also tapping into the lucrative advertising spaces for enterprise solutions

However, smaller startups must contend with the broader giants dominating ad markets; they must balance user acquisition with establishing a reliant customer base.

While the AI search market is teeming with innovation and rivalry, both traditional and AI-driven search engines must navigate the complexities of commercializationBaidu's recent earnings call highlighted the company’s cautious approach of prioritizing user experience before aggressively pursuing market shareThey are piloting monetization within verticals like law, education, and B2B services, aiming for incremental positive results.

For AI search engines to sustainably replace traditional models, they must excel in quality data delivery and establish distinguishable commercial frameworks that set them apart in an increasingly crowded marketplaceThe journey to find their unique position—whether parallel or hybrid with traditional methods—will depend on their ongoing evolution amid competitive pressures.