Baidu's Market Value Drops $2.4 Billion Amid CEO's Absence from Xi Jinping's Tech Meeting

Baidu's Market Value Plummets By $2.4 Billion Following CEO's Absence From Crucial Meeting Led By Chinese President Xi - Alibaba Gr Hldgs (NYSE:BABA), Baidu (NASDAQ:BIDU)

On Monday, the Hong Kong-listed shares of Baidu BIDU took a nosedive by 7%, wiping out $2.4 billion from the company's market value. This sharp decline came in the wake of the company founder's noticeable absence from a pivotal meeting with President Xi Jinping. What Happened: President Xi had called a meeting in Beijing with top Chinese business leaders, including Alibaba BABA founder Jack Ma and Huawei's Ren Zhengfei. However, Reuters reported that Baidu's founder, Robin Li, was not present at the meeting. The meeting with Xi was perceived as a sign of the government's backing for China's tech sector amid years of regulatory scrutiny and uncertain U.S. relations. Meanwhile, Baidu announced on Sunday, its plans to integrate both DeepSeek and its proprietary Ernie large language models (LLMs) into its search engine to provide a more diverse search experience following rival Tencent's TCEHY declaration that they would integrate DeepSeek's AI model into WeChat search. SEE ALSO: Xi Jinping And Jack Ma's Upcoming Meeting 'A Clear Message' Of Beijing's Support, Stock Soars In Hong Kong Ahead Of Earnings Why It Matters: Last week, Baidu's shares surged nearly 12%, fueled by excitement over China's advancements in AI and the earlier launch of DeepSeek R1. Seizing the moment, the company unveiled an upgraded version of its Ernie AI bot and revealed plans to open-source its AI models. The recent losses are largely attributed to profit-taking following the AI-driven rally. The company is also scheduled to release its fourth-quarter earnings on Feb. 18. However, Li's absence has led to speculation about Baidu's waning influence in the market. The company has been struggling with declining ad revenue, while its cloud division has experienced limited growth despite expanding its AI offerings over the past two years. Baidu's recent stock market performance comes amid a broader context of the company's efforts to stay competitive in the AI market. Baidu is preparing to launch its next-generation AI model, Ernie 5.0, later this year to compete with new entrants like DeepSeek. Furthermore, Baidu's CEO has emphasized the importance of continued investment in AI, despite the cost-effectiveness of AI models like DeepSeek. At the World Government Summit in Dubai, Robin Li highlighted the need for more investment to develop smarter models. READ MORE: AI Adoption To Boost Chinese Stocks By Up To $200 Billion, Predicts Goldman Sachs: EPS To Rise By 2.5% Annually Over Next 10 Years Image via Shutterstock Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. BABAAlibaba Group Holding Ltd$124.894.48%Overview Rating:Speculative50%Technicals Analysis660100Financials Analysis400100WatchlistOverviewBIDUBaidu Inc$97.721.17%TCEHYTencent Holdings Ltd$61.536.49%Market News and Data brought to you by Benzinga APIs

Baidu share slide wipes $2.4 billion off market value amid speculation over Xi meeting

HONG KONG (Reuters) - The Hong Kong shares of Baidu plunged on Monday, wiping $2.4 billion off its market value, after the founder of the Chinese search engine giant was not spotted at a rare meeting between President Xi Jinping and corporate leaders. Xi hosted a symposium in Beijing with the country's top tycoons, including Alibaba founder Jack Ma and Huawei's Ren Zhengfei, although two sources told Reuters there was no sign of Baidu's founder, Robin Li, attending. Baidu did not respond to a request for comment. Investors and market players pay close attention to the presence of senior executives at such key meetings, where the absence of a corporate leader can trigger speculation over a company's standing. Shares of Baidu slid as much as 8.8% before paring losses to close down 7%. Baidu, with its market value now at HK$252.05 billion ($32.4 billion), was the biggest loser on both the Hang Seng Index and Hang Seng Tech Index. Brokers said Baidu's shares had been weak since the morning after it said it would fully connect its search engine to Chinese AI start-up DeepSeek and its proprietary Ernie large language model. "That implies the company is losing its edge after all these years of taking a leading role through its development of Ernie, suggesting the firm may need to catch up with newcomers like DeepSeek," a sales director at a regional brokerage said, declining to be identified due to the sensitivity of the issue. The absence of Baidu executives from the symposium might also lead to speculation the company is losing its important position in the overall market, the sales director added. The meeting with Xi signalled the government's support for China's technology sector after years of regulatory controls as Beijing seeks to boost economic growth and navigate increasingly uncertain relations with the United States. For its part, Baidu has ramped up its push into AI as it seeks to reduce its reliance on advertising revenue from its core search engine business. The company was among the first to launch a ChatGPT-style chatbot in early 2023, following the launch of OpenAI's ChatGPT in late 2022. Baidu has stated that its current version, Ernie 4.0, matches the capabilities of OpenAI's GPT-4. (Reporting By Anne Marie Roantree and Donny Kwok in Hong Kong and Liam Mo in Beijing)