百度 (BIDU) 2023 Q2 法說會逐字稿

Hello, and thank you for standing by for Baidu's Second Quarter 2023 Earnings Conference Call. (Operator Instructions). Today's conference is being recorded. (Operator Instructions). I would now like to turn the meeting over to your host for today's conference, Juan Lin, Baidu's Director of Investor Relations.

您好，感謝您出席百度 2023 年第二季度財報電話會議。 （操作員說明）。今天的會議正在錄製中。 （操作員說明）。現在我想把會議交給今天的會議主持人，百度投資者關係總監林娟。

Hello, everyone, and welcome to Baidu's Second Quarter 2023 Earnings Conference Call. Baidu's earnings release was distributed earlier today, and you can find a copy on our website as well as on newswire services. On the call today, we have Robin Li, our Co-Founder and CEO; Rong Luo, our CFO; Dou Shen, our EVP, in charge of Baidu AI Cloud Group, ACG; and Xin-Zhe Li, our SVP, in charge of Baidu Intelligent Driving.

大家好，歡迎參加百度2023年第二季度財報電話會議。百度的財報已於今天早些時候發布，您可以在我們的網站以及新聞專線服務上找到副本。今天的電話會議有我們的聯合創始人兼首席執行官李彥宏；羅蓉，我們的首席財務官；竇深，我們的執行副總裁，負責百度AI雲事業群、ACG；李新哲，我們的高級副總裁，負責百度智能駕駛。

After our prepared remarks, we will hold a Q&A session. Please note that the discussion today will contain forward-looking statements made under the safe harbor provisions of the U.S. Credit Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from our current expectations. For detailed discussions of these risks and uncertainties, please refer to our latest annual report and other documents filed with SEC and Hong Kong Stock Exchange. Baidu does not undertake any obligation to update any forward-looking statements except as required under applicable law.

在我們準備好的發言之後，我們將舉行問答環節。請注意，今天的討論將包含根據1995 年美國信貸證券訴訟改革法案的安全港條款做出的前瞻性陳述。前瞻性陳述受到風險和不確定性的影響，可能導致實際結果與我們當前的結果存在重大差異。期望。有關這些風險和不確定性的詳細討論，請參閱我們向美國證券交易委員會和香港證券交易所提交的最新年度報告和其他文件。除適用法律要求外，百度不承擔更新任何前瞻性陳述的義務。

Our earnings press release and this call include discussions of certain unaudited non-GAAP financial measures. Our press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures and is available on our IR website at ir.baidu.com. As a reminder, this conference is being recorded. In addition, a webcast of this conference call will be available on Baidu's IR website.

我們的收益新聞稿和本次電話會議包括對某些未經審計的非公認會計準則財務指標的討論。我們的新聞稿包含未經審計的非 GAAP 衡量標準與未經審計的最直接可比的 GAAP 衡量標準的調節表，可在我們的 IR 網站 ir.baidu.com 上獲取。提醒一下，本次會議正在錄製中。此外，本次電話會議的網絡直播將在百度IR網站上進行。

I will now turn the call over to our CEO, Robin.

我現在將把電話轉給我們的首席執行官羅賓。

Hello, everyone. I'm pleased with our financial performance in the second quarter. Revenue from online marketing increased by 15% year-over-year, reflecting improvement in advertiser sentiment. In Q2, non-GAAP operating profit for mobile ecosystem continue to strengthen, and AI Cloud once again delivered positive operating profit.

大家好。我對我們第二季度的財務業績感到滿意。在線營銷收入同比增長 15%，反映出廣告商信心的改善。第二季度，移動生態系統的非 GAAP 營業利潤繼續增強，AI Cloud 再次實現正營業利潤。

At the same time, we are facing tremendous opportunities in foundation models or more broadly AGI. Today, I would like to share an update on our ongoing business transformation by utilizing ERNIE and ERNIE bot as well as our achievements in this field. After that, I will briefly go over the operational highlights for each of our business.

與此同時，我們在基礎模型或更廣泛的通用人工智能領域面臨著巨大的機遇。今天，我想分享一下我們利用 ERNIE 和 ERNIE bot 正在進行的業務轉型的最新情況以及我們在該領域取得的成就。接下來我簡單介紹一下我們各個業務的運營亮點。

Over the past few months, foundation models have captured the imagination of people and businesses around the world. It is becoming increasingly clear that foundation models will fundamentally transform work across industries, boosting overall productivity and accelerate the wider democratization of AI innovation. Right now, we are in the midst of a strong period. This is due to the fact that the hard work we put into generative AI over the years is now beginning to bear fruit.

在過去的幾個月裡，基礎模型激發了世界各地人們和企業的想像力。越來越明顯的是，基礎模型將從根本上改變跨行業的工作方式，提高整體生產力並加速人工智能創新更廣泛的民主化。目前，我們正處於一個強勁的時期。這是因為我們多年來在生成人工智能方面的努力現在開始結出碩果。

This pivotal and transformative opportunity is setting the stage for Baidu's future success, and we couldn't be more excited about it. On product and service front, we're using ERNIE and ERNIE bot to improve, rebuild and create new offerings. On the product side, we are reinventing our products, building AI native apps. For Baidu Search, AI has played an important role for many years in driving innovation and improving user experience, resulting in a consistent increase in the percentage of search queries satisfied by one short search results. It means the first search result displayed on the result page that can provide a satisfactory response to a search query.

這個關鍵的變革性機遇正在為百度未來的成功奠定基礎，我們對此感到非常興奮。在產品和服務方面，我們使用 ERNIE 和 ERNIE 機器人來改進、重建和創建新產品。在產品方面，我們正在重塑我們的產品，構建人工智能原生應用程序。對於百度搜索來說，多年來，人工智能在推動創新和改善用戶體驗方面發揮了重要作用，導致一個簡短的搜索結果滿足搜索查詢的比例持續上升。它是指結果頁面上顯示的第一個可以為搜索查詢提供滿意響應的搜索結果。

We're using ERNIE bot to enhance search experience making Baidu Search capable of answering complex questions that were previously unanswerable. For example, (inaudible) a marketing campaign proposal for a smartphone launch event or what kind of new energy vehicles will be suitable for a family of 6 with a budget of RMB 300,000.

我們正在使用 ERNIE 機器人來增強搜索體驗，使百度搜索能夠回答以前無法回答的複雜問題。例如（聽不清）智能手機發布會的營銷活動提案，或者什麼樣的新能源汽車適合預算為30萬元的六口之家。

ERNIE bot also enables Baidu Search to assist users with more personalized and in-depth research on the topic or project. The feedback from users who have tested these new features has been positive. Another example of product innovation is Baidu Wenku where many users search for articles, papers, books or campaigns to create documents on a wide range of topics and in many formats. We are currently beta testing an AI assistant feature that can generate customized content for users based on their query. User engagement and retention among Baidu Wenku's testing users for such feature saw a significant improvement. For example, users have doubled their time spend on Wenku after trying out the AI assistant feature. And they are more likely to become paying users.

ERNIE bot還使百度搜索能夠幫助用戶對主題或項目進行更加個性化和深入的研究。測試過這些新功能的用戶的反饋是積極的。產品創新的另一個例子是百度文庫，許多用戶搜索文章、論文、書籍或活動，以創建涉及廣泛主題和多種格式的文檔。我們目前正在測試一項人工智能助手功能，該功能可以根據用戶的查詢為用戶生成定制內容。百度文庫測試用戶的用戶參與度和留存率均得到顯著提升。例如，在嘗試了人工智能助手功能後，用戶在文庫上的使用時間增加了一倍。他們更有可能成為付費用戶。

Currently, Wenku has over 100 million monthly active users, and we believe such an intelligent feature will help Wenku attract even more users and convert non-paying users to paying users once it is rolled out on a large scale. Generative AI offers bright horizons for our online marketing business. And we are actively using the technology to build and rebuild our marketing products.

目前，文庫的月活躍用戶已超過1億，我們相信這樣的智能化功能一旦大規模推廣，將有助於文庫吸引更多用戶，並將非付費用戶轉化為付費用戶。生成式人工智能為我們的在線營銷業務提供了光明的前景。我們正在積極利用該技術來構建和重建我們的營銷產品。

Actually, our online marketing business has relied on AI for years to provide more value to advertisers. Last quarter, we've shared our progress on using AIGC to automate and -- to automate app creation in text format, which leads to an increase in conversion rate. This quarter, we further enabled advertisers to use AIGC to generate image and video ad with natural language.

事實上，我們的在線營銷業務多年來一直依靠人工智能為廣告商提供更多價值。上個季度，我們分享了使用 AIGC 實現自動化以及以文本格式自動創建應用程序的進展，從而提高了轉化率。本季度，我們進一步支持廣告商使用 AIGC 生成帶有自然語言的圖像和視頻廣告。

In Q2, we further improved our monetization system by using generative AI to broaden ad campaign keywords to user's search query, driving better monetization for advertisers. For example, an online professional education company's ad conversion increased by about 16% in August after using these new features. We are consistently enhancing our system using generative AI and we expect to introduce more and more new features in the coming months.

在第二季度，我們通過使用生成式人工智能將廣告活動關鍵字擴展到用戶的搜索查詢，進一步改進了我們的貨幣化系統，從而為廣告商帶來更好的貨幣化。例如，一家在線專業教育公司在使用這些新功能後，8 月份的廣告轉化率提高了約 16%。我們不斷使用生成式人工智能來增強我們的系統，並預計在未來幾個月內推出越來越多的新功能。

Additionally, we have been leveraging generative AI to enhance our [auction] system so that it can better match ads to search queries and search intent. Such improvement helped increase Baidu Search eCPM in Q2 and contributed to the year-over-year growth in online marketing revenue in the quarter. We're also in active conversations with advertisers to get their input on how to further make our marketing products work best for them. Meanwhile, we will continue to leverage ERNIE and ERNIE bot to help advertisers create sophisticated ad campaigns and improve ROI on Baidu.

此外，我們一直在利用生成式人工智能來增強我們的[拍賣]系統，以便它可以更好地將廣告與搜索查詢和搜索意圖相匹配。這種改善有助於提高第二季度百度搜索 eCPM，並推動該季度在線營銷收入同比增長。我們還與廣告商進行積極對話，以了解他們對如何進一步使我們的營銷產品最適合他們的意見。同時，我們將繼續利用 ERNIE 和 ERNIE bot 幫助廣告商製作複雜的廣告活動並提高百度的投資回報率。

One other initiative I'd like to mention here is that internally, we introduced an AI assistant within InfoFlow, Baidu's self-developed enterprise communication and collaboration platform. The AI assistant automates various workflows such as summarizing meeting notes, chat histories and workplace content, drafting documents, generating draft, facilitating knowledge Q&A and completing tasks such as creating meeting invite, applying for vacation days and conducting data analysis using natural language.

我想在這裡提到的另一項舉措是，我們在內部引入了百度自主開發的企業通信和協作平台InfoFlow中的人工智能助手。人工智能助手可以自動完成各種工作流程，例如總結會議記錄、聊天記錄和工作內容、起草文檔、生成草稿、促進知識問答以及使用自然語言完成創建會議邀請、申請假期和進行數據分析等任務。

This assistant helps our employees work more productively. We plan to open up the intelligent features of InfoFlow to our customers in the future. Alongside our own products, we are empowering cloud customers to build their transformative products and services using ERNIE bot. In Q2, the number of corporates connecting to ERNIE bot continue to grow. Foundation models, large language models and generative AI are expanding our total addressable market, attracting new customers while also increasing sales to our existing customers.

這位助理可以幫助我們的員工提高工作效率。我們計劃未來向客戶開放InfoFlow的智能功能。除了我們自己的產品之外，我們還幫助雲客戶使用 ERNIE 機器人構建他們的變革性產品和服務。第二季度，連接 ERNIE 機器人的企業數量繼續增長。基礎模型、大語言模型和生成人工智能正在擴大我們的總體潛在市場，吸引新客戶，同時也增加對現有客戶的銷售額。

We are also using ERNIE and ERNIE bot to help customers in various industries, address real-world challenges with unprecedented effectiveness and competence. This further strengthens the capabilities of ERNIE and ERNIE bot, empowering them to take on more significant role in solving industry-specific issues. For example, in the software development industry, we launched Baidu Comate, an AI coding assistant to the public in June. Baidu Comate aids people in coding and can be used in multiple programming languages. It has now been widely adopted Baidu's own R&D team who have reported a meaningful improvement in their productivity after using Comate. As of today, more than 100 organizations have tested Baidu Comate, and some of them have already decided to purchase Baidu Comate to boost productivity in coding.

我們還使用 ERNIE 和 ERNIE 機器人來幫助各行業的客戶以前所未有的效率和能力應對現實世界的挑戰。這進一步增強了 ERNIE 和 ERNIE 機器人的能力，使它們能夠在解決行業特定問題方面發揮更重要的作用。例如，在軟件開發行業，我們於6月份向公眾推出了人工智能編碼助手百度Comate。百度Comate幫助人們編碼，並且可以用於多種編程語言。現在，它已被百度自己的研發團隊廣泛採用，他們表示在使用 Comate 後，他們的生產力得到了顯著的提高。截至目前，已有超過 100 家組織測試了百度 Comate，其中一些組織已經決定購買百度 Comate 以提高編碼效率。

In the health care industry, we are solidifying our presence by utilizing industry expertise and sales network developed through our collaboration with leading hospitals in China. (inaudible) Limited, a traditional Chinese medicine clinic chain is using our early based model, developed for the health care industry to support doctors and their patient care.

在醫療保健行業，我們利用與中國領先醫院合作開發的行業專業知識和銷售網絡來鞏固我們的地位。 （聽不清）有限公司是一家傳統中醫診所連鎖店，正在使用我們為醫療保健行業開發的早期模式來支持醫生及其患者護理。

Our AI assistant helps doctors write notes for patients, analyze medical images and make informed clinical decisions among other tasks. It also helps patients find the most suitable doctor and department and provide [pre-consultation] service online. Furthermore, we've developed tools for model training and fine-training, data processing, labeling and more. These tools help to lower the threshold and cost for enterprises to use foundation models on Baidu and support them to train and operate their purpose-built models efficiently.

我們的人工智能助手幫助醫生為患者寫筆記、分析醫學圖像並在其他任務中做出明智的臨床決策。還可以幫助患者找到最合適的醫生和科室，並在線提供【預諮詢】服務。此外，我們還開發了用於模型訓練和精細訓練、數據處理、標記等的工具。這些工具有助於降低企業使用百度基礎模型的門檻和成本，支持企業高效地訓練和運營其專用模型。

Additionally, Baidu AI Cloud stands out as our AI optimized cloud infrastructure makes us a top performing platform for training and serving foundation models, including large lending model. This is why more and more enterprises are upping their digital spend on our cloud infrastructure to capture the new AI opportunities. This is particularly obvious among Internet and tech companies as they are early adopters of Gen AI and foundation models.

此外，百度人工智能雲脫穎而出，因為我們的人工智能優化的雲基礎設施使我們成為訓練和服務基礎模型（包括大型貸款模型）的最佳表現平台。這就是為什麼越來越多的企業增加在我們的雲基礎設施上的數字支出，以抓住新的人工智能機會。這在互聯網和科技公司中尤為明顯，因為它們是 Gen AI 和基礎模型的早期採用者。

Shifting our focus to technology. At Baidu, we maintained an unwavering commitment to improve earnings. During Q2, we unveiled ERNIE 3.5, our latest state-of-the-art foundation model, powered by PaddlePaddle. Notably, PaddlePaddle enhancements enable our self-developed 4-layer AI architecture to operate more seamlessly than ever before, significantly improve the frameworks compatibility with ERNIE and demonstrating engineering excellence. As a result, compared to ERNIE 3.0 version in March, ERNIE 3.5 has tripled its training throughput and its queries per second or QPS, for inference, has increased by more than 30 times.

將我們的注意力轉向技術。在百度，我們堅定不移地致力於提高盈利。在第二季度，我們推出了 ERNIE 3.5，這是我們最新的、最先進的基礎模型，由 PaddlePaddle 提供支持。值得注意的是，PaddlePaddle 的增強功能使我們自主開發的 4 層 AI 架構能夠比以往更加無縫地運行，顯著提高了框架與 ERNIE 的兼容性，並展示了卓越的工程設計。因此，與 3 月份的 ERNIE 3.0 版本相比，ERNIE 3.5 的訓練吞吐量增加了兩倍，每秒查詢數或推理 QPS 增加了 30 倍以上。

Additionally, I'm proud to note that IDC recently reported that ERNIE 3.5 surpassed peers in many areas such as algorithm, industry coverage, developer tools and ecosystem. As compared to ERNIE 3.0, 3.5 is capable of producing safer, more responsible and more creative responses, making significant improvements in question answering, reasoning and coding. ERNIE 3.5 is now powering ERNIE bot, with plug-ins to expand its functionality to cover real-time and precise information, long text summary, data analysis and [visualization], text-to-video conversion and facilitate dialogues that include images.

此外，我很自豪地註意到，IDC 最近報告稱，ERNIE 3.5 在算法、行業覆蓋範圍、開發者工具和生態系統等許多領域都超越了同行。與 ERNIE 3.0 相比，3.5 能夠產生更安全、更負責任和更具創造性的響應，在問答、推理和編碼方面取得顯著改進。 ERNIE 3.5 現在為 ERNIE 機器人提供支持，通過插件擴展其功能，涵蓋實時精確信息、長文本摘要、數據分析和[可視化]、文本到視頻轉換以及促進包括圖像的對話。

We are committed to enriching our ecosystem by adding more high-quality plug-in, in particular from third parties to contribute to the advancement of China's foundation model. On the ecosystem front, we are determined to make ERNIE the most popular foundation model in China. Importantly, we believe foundation models should be able to well support problem solving capabilities for various industries. As a result, we need to work collaboratively with our partners such as enterprises and AI developers to continually build industry models and solutions.

我們致力於通過添加更多優質插件，特別是來自第三方的插件來豐富我們的生態系統，為中國基金會模式的進步做出貢獻。在生態方面，我們決心讓ERNIE成為中國最受歡迎的基金會模型。重要的是，我們認為基礎模型應該能夠很好地支持各個行業的問題解決能力。因此，我們需要與企業、AI開發者等合作夥伴共同協作，不斷構建行業模型和解決方案。

Our 8 million developers on PaddlePaddle are the anchor that we can leverage to build a community for ERNIE. To foster a vibrant ecosystem, we hosted Baidu's ERNIE Cup Innovation Challenge. It attracted almost 1,000 startups to submit their ideas and prototypes, covering (inaudible) encompassing productivity towards developers, sales and marketing companies, entertainment companies, social platforms, middleware developers as well as applications across different industries, including education, health care, finance, et cetera.

PaddlePaddle 上的 800 萬開發者是我們為 ERNIE 構建社區的支柱。為了培育充滿活力的生態系統，我們舉辦了百度ERNIE杯創新挑戰賽。它吸引了近1,000 家初創公司提交他們的想法和原型，涵蓋（聽不清）開發人員、銷售和營銷公司、娛樂公司、社交平台、中間件開發人員以及不同行業的應用程序的生產力，包括教育、醫療保健、金融、等等。

We have also launched a venture fund of RMB 1 billion to support (inaudible) in divesting all kinds of AI native applications, which will complement our organic growth. On regulation, Baidu has recently -- Baidu was recently appointed as a leader of China's LLM standardization task force at the World AI Conference. This position signifies national level recognition and endorsement of our foundation models and AI capabilities. While we are still waiting for the green light for a large-scale rollout of ERNIE bot, we have observed that Chinese government has been increasingly supportive of the development of Gen AI and LLM.

我們還設立了 10 億元人民幣的風險基金，以支持（聽不清）剝離各類人工智能原生應用，這將補充我們的有機增長。在監管方面，百度最近在世界人工智能大會上被任命為中國法學碩士標準化工作組組長。這一立場標誌著國家層面對我們的基礎模型和人工智能能力的認可和認可。當我們仍在等待 ERNIE 機器人大規模推出的綠燈時，我們觀察到中國政府越來越支持 Gen AI 和 LLM 的發展。

As a market leader, we believe Baidu is well capable of benefiting from the opportunity and contributing to this mega trend in China. Now let's have a quick look of the second quarter operating highlights for each business.

作為市場領導者，我們相信百度完全有能力從這一機遇中受益，並為中國的這一大趨勢做出貢獻。現在讓我們快速了解一下各業務第二季度的經營亮點。

Revenue from AI Cloud increased by 5% year-over-year to RMB 4.5 billion in the quarter, and AI Cloud maintained positive non-GAAP operating profit. Our business has become healthier than ever, laying a solid foundation for future growth. On intelligent driving, in Q2, the rights provided by Apollo Go increased by about 150% year-over-year to around 714,000, resulting in cumulative rides exceeding 3.3 million, which is greater than our closest competitor by orders of magnitude.

本季度AI雲營收同比增長5%至人民幣45億元，AI Cloud保持正的非公認會計準則營業利潤。我們的業務比以往任何時候都更加健康，為未來的增長奠定了堅實的基礎。智能駕駛方面，第二季度Apollo Go提供的授權量同比增長約150%，達到71.4萬次左右，累計騎行次數超過330萬次，比最接近的競爭對手高出幾個數量級。

This leadership in operation implies competitive advantages in data quantity and quality, the better models and greater safety rates. In addition, Apollo Go has widened its footprint in fully driverless ride-hailing services in more cities. In mid-June, Apollo Go received a permit from Shenzhen (inaudible) government to offer fully driverless ride-hailing services to the public.

這種運營領先地位意味著數據數量和質量、更好的模型和更高的安全率方面的競爭優勢。此外，Apollo Go 已在更多城市擴大了完全無人駕駛乘車服務的足跡。 6 月中旬，Apollo Go 獲得了深圳市（聽不清）政府的許可，可以向公眾提供完全無人駕駛的乘車服務。

Ending early July, in Shanghai, we were allowed to conduct fully driverless testing on open roads as well. With the expansion of the area and fleet size for fully driverless operations, along with the improvement of operational efficiency, we witnessed growth not only in the total average daily orders, but also in the portion of fully driving orders within the overall order portfolio. This highlights a promising pathway for improving the unit economics of autonomous driving.

七月初，在上海，我們也被允許在開放道路上進行完全無人駕駛的測試。隨著全無人駕駛作業區域和車隊規模的擴大，以及運營效率的提升，我們不僅看到了日均訂單總量的增長，而且全無人駕駛訂單在整體訂單組合中的佔比也有所增長。這凸顯了提高自動駕駛單位經濟性的一條有前途的途徑。

In particular, in Wuhan, where we initiated fully driverless ride-hailing services 1 year ago, the UE continued to improve in the past few quarters. On the revenue side, the average daily order volume and revenue per order have surged propelling total revenue to grow. Meanwhile, the cost of per kilometer per car is decreasing as well, thanks to improved operational efficiency.

特別是在武漢，我們在一年前推出了完全無人駕駛的網約車服務，UE在過去幾個季度持續改善。收入方面，日均訂單量和單筆收入大幅增長，帶動總收入增長。與此同時，由於運營效率的提高，每輛車每公里的成本也在下降。

Finally, on mobile ecosystem, our users continue to grow with Baidu App's MAUs increasing by 8% year-over-year to 677 million in June. Also in June, videos distributed by Baidu app achieved double-digit growth year-over-year. Baidu remains a significant platform for users who are seeking a wide range of content such as information, products and services. The revenue growth rate for online marketing accelerated in Q2, aided by strength in various verticals with off-line exposure, including health care, business services, local services and travel. At the same time, revenue from e-commerce demonstrated trends and outperformed in the quarter.

最後，在移動生態系統上，我們的用戶繼續增長，6 月份百度 App 的月活躍用戶數同比增長 8% 至 6.77 億。同樣在6月份，百度應用分發的視頻同比實現兩位數增長。對於尋求信息、產品和服務等廣泛內容的用戶來說，百度仍然是一個重要的平台。得益於醫療保健、商業服務、本地服務和旅遊等線下業務的各個垂直領域的實力，第二季度在線營銷的收入增速加快。與此同時，電子商務收入在本季度呈現出趨勢並跑贏大盤。

Non-GAAP operating profit for our mobile ecosystem grew steadily year-over-year in the quarter. Mobile ecosystem continued to generate robust cash flow to fund our investments in AI, particularly in foundation models and Generative AI. We are confident that revenue, profits and cash flow generated from our mobile ecosystem, while it remains strong in the future.

本季度我們移動生態系統的非公認會計原則營業利潤同比穩定增長。移動生態系統繼續產生強勁的現金流，為我們對人工智能的投資提供資金，特別是在基礎模型和生成人工智能方面。我們對我們的移動生態系統產生的收入、利潤和現金流充滿信心，同時在未來仍然保持強勁。

With that, let me turn the call over to Rong to go through our financial results.

接下來，讓我將電話轉給榮，以查看我們的財務業績。

Thank you, Robin. Now let me walk you through the details of our second quarter financial results. Total revenue was RMB 34.1 billion, increasing 15% year-over-year. Revenue from Baidu Core was RMB 26.4 billion, increasing 14% year-over-year. Baidu Core's online marketing revenue was RMB 19.6 billion, increasing 15% year-over-year. Baidu Core's non-online marketing revenue was RMB 6.8 billion, up 12% year-over-year. In Q2, our AI cloud revenue increased by 5% year-over-year to RMB 4.5 billion. Revenue from iQIYI was RMB 7.8 billion, increasing 17% year-over-year. Cost of revenue was RMB 16.2 billion, increasing 7% year-over-year.

謝謝你，羅賓。現在讓我向您介紹我們第二季度財務業績的詳細信息。總收入為人民幣341億元，同比增長15%。百度核心收入為人民幣264億元，同比增長14%。百度核心在線營銷收入為人民幣196億元，同比增長15%。百度核心非在線營銷收入為人民幣68億元，同比增長12%。第二季度，我們的AI雲收入同比增長5%至人民幣45億元。愛奇藝收入為人民幣78億元，同比增長17%。收入成本為人民幣162億元，同比增長7%。

Baidu's cost of revenue was RMB 10.6 billion, increasing 4% year-over-year. Operating expenses were RMB 12.7 billion, increasing 14% year-over-year, primarily due to an increase in channel spending, promotional marketing expenses, server depreciation expenses and cloud-related expenses, which supports ERNIE bot research inputs and partially offset by the decrease in personnel-related expenses. Baidu Core's operating expenses were RMB 11.3 billion, increasing 15% year-over-year. Baidu Core SG&A expenses were RMB 5.3 billion, increasing 34% year-over-year. SG&A accounting for 20% of Baidu Core revenue in the quarter compared to 17% in the same period last year. Baidu Core R&D expenses was RMB 5.9 billion, increasing 2% year-over-year, R&D accounting for 23% of Baidu Core revenue in the quarter and decreased from 25% in the same period last year.

百度的收入成本為人民幣106億元，同比增長4%。運營費用為人民幣127億元，同比增長14%，主要是由於渠道支出、促銷營銷費用、服務器折舊費用和雲相關費用的增加，支持了ERNIE機器人研究投入，但被部分減少所抵消與人事相關的費用。百度核心運營費用為人民幣113億元，同比增長15%。百度核心SG&A費用為人民幣53億元，同比增長34%。 SG&A 佔本季度百度核心收入的 20%，而去年同期為 17%。百度核心研發費用為人民幣59億元，同比增長2%，本季度研發費用佔百度核心收入的23%，較去年同期的25%有所下降。

Operating income was RMB 5.2 billion. Baidu Core's operating income was RMB 4.6 billion and Baidu Core's operating margin was 17%. Non-GAAP operating income was RMB 7.3 billion. Non-GAAP Baidu Core's operating income was RMB 6.5 billion and non-GAAP Baidu Core operating margin was 25%.

營業收入52億元人民幣。百度核心的營業收入為人民幣46億元，百度核心的營業利潤率為17%。非公認會計準則營業收入為人民幣 73 億元。非 GAAP 百度核心營業收入為人民幣 65 億元，非 GAAP 百度核心營業利潤率為 25%。

Total other income, net was RMB 1.4 billion compared to RMB 151 million in the same period last year, primarily due to the increase in net foreign exchange gains and net interest income, partially offset by the increase of fair value loss from long-term investments. Income tax expenses was RMB 1.3 billion compared to RMB 25 million in the same period last year. The lower level of income tax expenses in the second quarter of 2022 is primarily due to the reversal of certain tax expenses based on the 2021 tax return.

其他收入總額淨額為人民幣 14 億元，而去年同期為人民幣 1.51 億元，主要是由於淨匯兌收益和淨利息收入增加，部分被長期投資公允價值損失增加所抵消。所得稅費用為人民幣13億元，去年同期為人民幣2500萬元。 2022年第二季度所得稅費用水平較低主要是由於根據2021年納稅申報表沖銷了某些稅務費用。

Apart from the reversals, the main reason for the increase of income tax expenses is the increase in profit before tax year-over-year. Net income attributable to Baidu was RMB 5.2 billion, and diluted earnings per ADS was RMB 14.17. Net income attributable to Baidu Core was RMB 5 billion, and net margin for Baidu Core was 19%. Non-GAAP net income attributable to Baidu was RMB 8 billion. Non-GAAP diluted earnings per ADS was RMB 22.55. Non-GAAP net income attributable to Baidu Core was RMB 7.7 billion. Non-GAAP net margin for Baidu Core was 29%.

除轉回外，所得稅費用增加的主要原因是稅前利潤同比增加。歸屬於百度的淨利潤為人民幣52億元，攤薄後每股ADS收益為人民幣14.17元。歸屬於百度核心的淨利潤為人民幣50億元，百度核心淨利潤率為19%。非美國通用會計準則歸屬於百度的淨利潤為人民幣80億元。非 GAAP 稀釋後每股美國存託股收益為人民幣 22.55 元。非美國通用會計準則歸屬於百度核心的淨利潤為人民幣77億元。百度核心的非 GAAP 淨利潤率為 29%。

As of June 30, 2023, cash, cash equivalents, restricted cash and short-term investments were RMB 201.5 billion and cash, cash equivalents, restricted cash and short-term investments excluding iQIYI were RMB 196.9 billion. Free cash flow was RMB 7.9 billion, and free cash flow, excluding iQIYI was RMB 7.1 billion. Baidu Core had approximately 35,000 employees as of June 30, 2023.

截至2023年6月30日，現金、現金等價物、限制性現金和短期投資為人民幣2,015億元，除愛奇藝外的現金、現金等價物、限制性現金和短期投資為人民幣1,969億元。自由現金流為人民幣79億元，不包括愛奇藝的自由現金流為人民幣71億元。截至2023年6月30日，百度核心擁有約35,000名員工。

With that, operator, let's now open the call to questions.

接線員，現在讓我們開始提問。

(Operator Instructions) The first question today comes from Alicia Yap with Citigroup.

（操作員說明）今天的第一個問題來自花旗集團的 Alicia Yap。

So can management provide update on the current state of the advertising industry, including how online and off-line platforms are recovering. Can management also share about the pace of recovery for key industry and which one have a stronger seasonality? And then in addition, can management also discuss the main drivers for the growth in this industry. And finally, what are the medium-term growth targets for ads as we are now already behind the pandemic and with the current latest macro situation.

管理層能否提供有關廣告行業當前狀況的最新信息，包括線上和線下平台的複蘇情況。管理層能否分享一下關鍵行業的複蘇速度以及哪個行業的季節性較強？此外，管理層能否也討論一下該行業增長的主要驅動力？最後，廣告的中期增長目標是什麼，因為我們現在已經落後於大流行並考慮到當前最新的宏觀形勢。

Alicia, this is Robin. Let me answer your question. Our online marketing revenue increased by 15% year-over-year last quarter. I think a number of drivers contributed to this growth. On the vertical side, as we are coming out of the pandemic, many off-line verticals like health care, business services, local services and travel continue to outperform. For example, health care, we saw solid year-over-year growth in both search queries and eCPM, which leads to revenue strength. We're seeing this momentum continue. Offline sector contributes to a sizable amount of total online marketing revenue to Baidu. And in the meantime, e-commerce continue to grow in Q2 and remain top revenue contributor. For market like e-commerce, it's highly competitive.

艾麗西亞，這是羅賓。讓我回答你的問題。上季度我們的在線營銷收入同比增長 15%。我認為有許多驅動因素促成了這種增長。在垂直領域，隨著我們走出大流行，醫療保健、商業服務、本地服務和旅遊等許多線下垂直行業的表現繼續優於大盤。例如，在醫療保健領域，我們看到搜索查詢和有效每千次展示費用均實現了同比穩健增長，這導致了收入強勁。我們看到這種勢頭仍在繼續。線下部門為百度貢獻了相當大的在線營銷總收入。與此同時，電子商務在第二季度繼續增長，仍然是最大的收入貢獻者。對於電子商務這樣的市場來說，競爭非常激烈。

So more and more merchants, they come to realize the value of Baidu and they come to us to acquire new users and buyers and also invite their existing buyers to come back and buy more. For the second half of the year, we should continue to see a pretty clear recovery trend for our online marketing business. Also remember, (inaudible) is the most effective form of performance-based ad. This is because users approach search with a clear intent and search ads allows us to connect this intention directly with the most relevant product service offerings. In fact, the eCPM for search outgrow other ad formats in the quarter, reflecting the effectiveness. Due to the relatively high comp base in Q3, the growth rate might not be as high as Q2, but it should well outperform China's GDP growth.

因此，越來越多的商家開始意識到百度的價值，他們來找我們來獲取新用戶和買家，並邀請他們現有的買家回來購買更多產品。下半年，我們的在線營銷業務應該會繼續看到相當明顯的複蘇趨勢。另請記住，（聽不清）是基於效果的廣告的最有效形式。這是因為用戶以明確的意圖進行搜索，而搜索廣告使我們能夠將這種意圖直接與最相關的產品服務聯繫起來。事實上，本季度搜索的 eCPM 增長超過了其他廣告格式，反映了有效性。由於第三季度的比較基數相對較高，增速可能不會像第二季度那麼高，但應該會遠遠跑贏中國GDP的增長。

Additionally, we have more immersive video features. More and more users are watching the short videos on Baidu. Short videos distributed through the Baidu App again grew by double digits in Q2. As a result, revenue from short videos continue to grow quite well, contributing meaningfully to the overall online marketing revenue growth. Looking into the mid- to long term, I believe both user traffic growth and monetization upgrades are important growth drivers for our online marketing business. And on the user side, I talked about our MAU. It grew by 8% year-over-year in Baidu App growth rate in June -- in the month of June. If we look at search, we are renovating the Baidu Search step by step using ERNIE bot. We believe it will provide users with innovative and intuitive experience, which will help our mobile ecosystem gain traffic and increase user time spend.

此外，我們還有更多身臨其境的視頻功能。越來越多的用戶在百度上觀看短視頻。第二季度，通過百度應用分發的短視頻再次實現兩位數增長。因此，短視頻收入繼續保持良好增長，對整體在線營銷收入增長做出了重大貢獻。從中長期來看，我認為用戶流量增長和變現升級都是我們在線營銷業務的重要增長動力。在用戶方面，我談到了我們的 MAU。 6月份百度App增速同比增長8%。如果我們看搜索，我們正在使用ERNIE bot逐步改造百度搜索。我們相信它將為用戶提供創新和直觀的體驗，這將有助於我們的移動生態系統獲得流量並增加用戶的時間花費。

And on the monetization side, we've been leveraging AI to improve ad targeting capabilities and our bidding system for a number of years. And now with ERNIE and ERNIE bot, we are further upgrading the game. I mentioned earlier that we have made some major improvement in advertising technology by using LLM and generative AI allowing for more innovative and personalized ads. I believe there are lots of room for growth in this aspect, and I look forward to further breakthroughs. Such improvement in monetization technology have started to contribute to revenue and eCPM growth starting from this quarter and Q3. Thank you.

在貨幣化方面，多年來我們一直在利用人工智能來改進廣告定位能力和出價系統。現在有了 ERNIE 和 ERNIE bot，我們正在進一步升級遊戲。我之前提到，通過使用法學碩士和生成式人工智能，我們在廣告技術方面取得了一些重大改進，可以提供更具創新性和個性化的廣告。我相信這方面還有很大的成長空間，期待進一步的突破。從本季度和第三季度開始，貨幣化技術的改進已開始為收入和 eCPM 增長做出貢獻。謝謝。

The next question comes from Gary Yu with Morgan Stanley.

下一個問題來自摩根士丹利的 Gary Yu。

I have a couple of questions related to AI product and monetization. First is, can management share some insight on how users have responded to the integration of ERNIE bot in multiple products. Any new development of feature that have come up with the ERNIE bot offerings (inaudible) help with market growth in China Internet and specifically in the mobile Internet sector? And also, lastly, I would like to know more about the monetization (inaudible) play a role in your advertising business? And also (inaudible) in addition update in key industries and use cases related to [B side]. Can you provide additional information on the business model and also potential revenue? Specifically, I would like to gain a better understanding on financial impact on cloud performance?

我有幾個與人工智能產品和貨幣化相關的問題。首先，管理層能否分享一些關於用戶對 ERNIE 機器人在多個產品中集成的反應的見解。 ERNIE 機器人產品（聽不清）是否有任何新的功能開發有助於中國互聯網，特別是移動互聯網領域的市場增長？最後，我想更多地了解貨幣化（聽不清）在您的廣告業務中發揮的作用？此外（聽不清）還更新了與 [B 方] 相關的關鍵行業和用例。您能否提供有關商業模式和潛在收入的更多信息？具體來說，我想更好地了解財務對雲性能的影響？

Gary, let me answer the consumer-facing products part of your question, and I'll have Dou talk about the enterprise side, especially cloud business. I think it's clear we are in a paradigm shift in our business. With our early commitment to AI, we saw this time coming. We are reinventing our consumer-facing products with an AI-native mindset. As I mentioned in my opening remarks, we are rebuilding our search experience. Users who are testing our ERNIE bot enabled Baidu Search and Baidu App tend to ask more questions that were not frequently searched in the past and we tend to have multi-round conversation and interaction. This is quite different from the user behavior for traditional search. Therefore, it's an incremental business for us. We are using generative AI to construct direct answers to user queries. This typically creates better and easier to understand answers than experts from existing web pages.

Gary，我來回答你問題中面向消費者的產品部分，我請竇先生談談企業方面，特別是雲業務。我認為很明顯我們的業務正在發生範式轉變。憑藉我們對人工智能的早期承諾，我們看到了這個時代的到來。我們正在以人工智能原生思維重塑面向消費者的產品。正如我在開場白中提到的，我們正在重建我們的搜索體驗。正在測試啟用我們的 ERNIE 機器人的百度搜索和百度應用程序的用戶往往會提出更多過去不常搜索的問題，並且我們往往會進行多輪對話和互動。這與傳統搜索的用戶行為有很大不同。因此，這對我們來說是一項增量業務。我們正在使用生成式人工智能來構建對用戶查詢的直接答案。這通常會比現有網頁上的專家創建更好、更容易理解的答案。

We see increases in click-through rate and user retention rate for these kind of changes. We also launched the testing version of ERNIE bot APP, a step alarm app that is built up, our latest generative AI and LLM. And it aims to serve users as a personal assistant. We see ERNIE bot as a potential new traffic gateway that can connect users to various applications, including Baidu and other third-party applications to address users' needs. We also launched ERNIE bot plug-in like search, like chatbot, Ecard, et cetera.

我們看到此類變化的點擊率和用戶保留率有所提高。我們還推出了ERNIE bot APP的測試版本，這是一個已構建的計步警報應用程序，我們最新的生成式AI和LLM。它旨在為用戶提供私人助理服務。我們將ERNIE bot視為一個潛在的新流量網關，可以將用戶連接到各種應用程序，包括百度和其他第三方應用程序，以滿足用戶的需求。我們還推出了 ERNIE 機器人插件，如搜索、聊天機器人、電子賀卡等。

Developers will soon be able to submit their application as ERNIE bot plug-in. For Baidu Wenku, it's the AI assistant feature, average user time spend more than doubled and the 7-day retention rate has increased by almost 10%. With the AI assistant, I will not be surprised that we can convert more users into paying accounts and charge-off premium for the new AI function in the future.

開發人員很快就能將他們的應用程序作為 ERNIE 機器人插件提交。對於百度文庫來說，憑藉AI助手功能，用戶平均花費時間增加了一倍以上，7天留存率增加了近10%。有了AI助手，未來我們可以將更多用戶轉化為付費賬戶，並為新的AI功能沖銷溢價，我不會感到驚訝。

Overall, we are highly encouraged by user feedback. This is just the beginning for us to reconstruct all the products and businesses with LLM and Generative AI. Very importantly, we have also same promising opportunities to lift up the monetization capability by rebuilding our advertising system. As I mentioned in the prepared remarks, ERNIE and ERNIE bot allow us to continue improving our targeting and (inaudible) app bidding system. All in all, I believe that Generative AI will help us gain market share of many products and ultimately become a new growth driver for our online marketing business.

總的來說，我們對用戶反饋感到非常鼓舞。這只是我們用LLM和Generative AI重構所有產品和業務的開始。非常重要的是，我們也有同樣有希望的機會通過重建我們的廣告系統來提升貨幣化能力。正如我在準備好的發言中提到的，ERNIE 和 ERNIE 機器人使我們能夠繼續改進我們的定位和（聽不清）應用程序出價系統。總而言之，我相信生成式人工智能將幫助我們獲得許多產品的市場份額，並最終成為我們在線營銷業務的新增長動力。

Gary, for your second part, right? So for the impact on our cloud business, I would first mention that the beauty of the foundation model and Generative AI is that it can help organizations -- in many industry to increase productivity and efficiency. We see more and more enterprises willing to adopt such latest AI technologies and that's why we will say the new technology is increasing our time. Specifically, ERNIE and ERNIE bot has been helping our customers from different industries to handle their business challenges more effectively, ranging from like software, Internet, health care, education, (inaudible), finance and even to the public sector.

加里，你的第二部分，對嗎？因此，對於對我們雲業務的影響，我首先要提到的是，基礎模型和生成式人工智能的優點在於它可以幫助許多行業的組織提高生產力和效率。我們看到越來越多的企業願意採用這種最新的人工智能技術，這就是為什麼我們會說新技術正在增加我們的時間。具體來說，ERNIE 和 ERNIE bot 一直在幫助來自不同行業的客戶更有效地應對他們的業務挑戰，從軟件、互聯網、醫療保健、教育、（聽不清）、金融甚至公共部門。

So they use ERNIE and ERNIE bot to [trim] models, to build applications and to improve solutions for efficiency gains, such as improving their customer service, producing different kinds of the content, reading [coat], providing knowledge searches within their organizations as well as increasing their sales and marketing efforts. As to the business models you just asked, I think it's still at its very early stage, and it's evolving. Though we have our preference but we are pretty open and would like to take any effort to speed up the growth of generative AI.

因此，他們使用 ERNIE 和 ERNIE 機器人來[修剪]模型、構建應用程序並改進解決方案以提高效率，例如改善客戶服務、生成不同類型的內容、閱讀[外套]、在組織內提供知識搜索，例如以及增加銷售和營銷力度。至於你剛才問到的商業模式，我認為還處於非常早期的階段，而且還在不斷發展。儘管我們有自己的偏好，但我們非常開放，願意盡一切努力來加速生成人工智能的發展。

So in addition to providing AI computing infrastructure to our customers, we also consider charging customers for the usage of ERNIE and ERNIE bot or using our AI applications such as Comate Robin just mentioned. And also, we can charge our customers for retraining or operating their own models on our platform or we can deploy the foundation models to our customers' private cloud on the project basis. So we expect the revenue generated from this new opportunity to be gradual, but we build the long-term potential is (inaudible). So we'll continue to invest in ERNIE and ERNIE bot to serve our customers well for the long term. That's it, Gary.

所以除了向我們的客戶提供AI計算基礎設施之外，我們還考慮向客戶收取ERNIE和ERNIE bot的使用費用，或者使用我們的AI應用程序（例如剛才提到的Comate Robin）。此外，我們還可以向客戶收取在我們的平台上重新訓練或操作他們自己的模型的費用，或者我們可以根據項目將基礎模型部署到客戶的私有云。因此，我們預計這個新機會產生的收入將是漸進的，但我們建立的長期潛力是（聽不清）。因此，我們將繼續投資 ERNIE 和 ERNIE 機器人，以便為我們的客戶提供長期良好的服務。就是這樣，加里。

The next question comes from Lincoln Kong with Goldman Sachs.

下一個問題來自高盛的林肯孔。

So my question is about the cloud business. So could management help us understand sort of the main reason for the revenue slowdown for cloud this quarter. And when do we expect the revenue to pick up or accelerate again? When we're looking ahead into the second half of our entire year of 2023, how is the revenue growth trajectory expected to play out? And what factors will be driving that? And also on the profitability side, I'm also curious whether this profit breakeven on a non-GAAP operating level is sustainable? And what's the current trend for the AI cloud profitability?

所以我的問題是關於雲業務的。因此，管理層能否幫助我們了解本季度雲收入放緩的主要原因。我們預計收入何時會再次回升或加速？當我們展望 2023 年下半年時，預計收入增長軌跡將如何？哪些因素會推動這一趨勢？在盈利能力方面，我也很好奇這種非公認會計準則運營水平上的利潤盈虧平衡是否可持續？目前AI雲盈利趨勢如何？

Okay. Thank you for the question. I'll take it. So cloud revenue grew 5% year-over-year in Q2, and we continue to generate profit on the non-GAAP operating level. It means that our business is becoming healthier laying a solid foundation for sustainable growth in the future. The growth rate was mainly dragged by government-related projects, which usually take a longer time to recover after the pandemic. But many enterprise related products in the key verticals like manufacturing, utilities and Internet service has demonstrated quite solid growth in Q2. As I just mentioned before, we see strong interest from existing and new customers in Generative AI, so while some of them directly leverage ERNIE or ERNIE bot to enhance their products to improve their operational efficiency.

好的。感謝你的提問。我要買它。因此，第二季度雲收入同比增長 5%，並且我們繼續在非 GAAP 運營水平上產生利潤。這意味著我們的業務正在變得更加健康，為未來的可持續發展奠定了堅實的基礎。增長速度主要受到政府相關項目的拖累，這些項目通常在疫情后需要較長時間才能恢復。但製造業、公用事業和互聯網服務等關鍵垂直領域的許多企業相關產品在第二季度表現出相當穩健的增長。正如我之前提到的，我們看到現有客戶和新客戶對生成式人工智能有著濃厚的興趣，因此，儘管其中一些客戶直接利用ERNIE 或ERNIE 機器人來增強他們的產品，以提高他們的運營效率。

So some of them actually choose our AI infrastructure as the foundation for their models and applications. Though it may take a little while to see significant revenue contribution, but this opens up a very new space for our cloud business where we're already in a leading position. So on the profit side, we believe we can keep generating operating profit from AI Cloud as we did in the previous quarters. So this indicates that actually our business is becoming increasingly healthy. But we are going to keep standardize our AI solutions, that can effectively address AI critical pinpoints and then replicate them from 1 project to another, which will further grow the margin and profit.

因此，他們中的一些人實際上選擇我們的人工智能基礎設施作為他們的模型和應用程序的基礎。儘管可能需要一段時間才能看到顯著的收入貢獻，但這為我們的雲業務開闢了一個非常新的空間，我們已經處於領先地位。因此，在利潤方面，我們相信我們可以像前幾個季度一樣繼續從 AI Cloud 中獲得營業利潤。所以這表明我們的業務實際上正在變得越來越健康。但我們將繼續標準化我們的人工智能解決方案，這些解決方案可以有效地解決人工智能的關鍵點，然後將它們從一個項目複製到另一個項目，這將進一步增加利潤和利潤。

The next question comes from Kenneth Fong with Credit Suisse.

下一個問題來自瑞士信貸銀行的 Kenneth Fong。

I have a question regarding the generative AI. Regarding the recent introduced interim measures to regulate generative AI service by the government, could you provide insight into whether this suggests an imminent authorization of the large language models? Additionally, do you have a projected time line for the rollout of the applications utilizing these models?

我有一個關於生成人工智能的問題。關於政府最近出台的監管生成人工智能服務的臨時措施，您能否介紹一下這是否表明大型語言模型即將獲得授權？此外，您是否有使用這些模型推出應用程序的預計時間表？

Thank you for your question, Ken. We're seeing the government continue to support for tech innovation, including AI and foundation models. I think a good sign of this is that the new guidelines and specifications that came out in mid-July about how to use generative AI technology and related services in China. This is a new version, and this version went effective, I think, on August 15. Compared to the previous version, this version you can probably tell, it's more a pro-innovation than regulation. We are still waiting for the green light for large-scale rollout of ERNIE bot for its use in the consumer-facing apps. But as I said before, the government has increasingly recognized ERNIE and ERNIE bot, which we believe provides a good foundation for the eventual release of ERNIE bot on a large scale.

謝謝你的問題，肯。我們看到政府繼續支持技術創新，包括人工智能和基礎模型。我認為一個好的跡像是7月中旬出台的關於如何在中國使用生成式人工智能技術和相關服務的新指南和規範。這是一個新版本，這個版本我想是8月15日生效的。與之前的版本相比，這個版本你大概可以看出，它更多的是鼓勵創新而不是監管。我們仍在等待 ERNIE 機器人大規模推出的綠燈，以便在面向消費者的應用程序中使用。但正如我之前所說，政府對ERNIE和ERNIE bot的認可度越來越高，我們相信這為ERNIE bot的最終大規模發布提供了良好的基礎。

Generative AI is pretty new and it's understandable that people might have concerns about things like user privacy, IP protection, AI ethics, so there should be certain regulatory requirements in place. At Baidu, we have accumulated extensive experience in providing appropriate information to the vast amount of Internet users. And we are a leader in not only AI technology for commercial purposes but also using AI for good. In fact, we are working closely with the regulators and other organizations to push the divestment and appropriate usage of generative AI. So we believe we are well positioned to benefit from this opportunity and contribute to this mega trend of generative AI in China. So while we don't have an exact date for everything, but the trend is very promising, and we are quite optimistic about this future of a better regulatory environment.

生成式人工智能是一個相當新的技術，人們可能對用戶隱私、知識產權保護、人工智能道德等問題感到擔憂，這是可以理解的，因此應該有一定的監管要求。在百度，我們在向廣大互聯網用戶提供適當信息方面積累了豐富的經驗。我們不僅在商業用途的人工智能技術方面處於領先地位，而且在將人工智能用於公益方面也處於領先地位。事實上，我們正在與監管機構和其他組織密切合作，推動生成式人工智能的撤資和適當使用。因此，我們相信我們處於有利地位，可以從這一機會中受益，並為中國生成人工智能的大趨勢做出貢獻。因此，雖然我們沒有所有事情的確切日期，但趨勢非常有希望，我們對更好的監管環境的未來非常樂觀。

The next question comes from Wei Xiong with UBS.

下一個問題來自瑞銀集團的熊偉。

My question is also related to the foundation model. How can we assess Baidu's foundation model's performance comparing to other Chinese peers? And also related to that, when we think about industry-specific models versus foundation models, how the balance between these 2 will shape up the broader AI landscape in the future? And now we have more companies offering or focusing on models tailored to specific industries. So how does management perceive the landscape in terms of opportunities and competition. So what are our competitive edges?

我的問題也與基礎模型有關。與其他中國同行相比，我們如何評估百度基礎模型的表現？與此相關的是，當我們考慮特定行業模型與基礎模型時，這兩者之間的平衡將如何塑造未來更廣泛的人工智能格局？現在，我們有更多的公司提供或專注於針對特定行業量身定制的模型。那麼管理層如何看待機遇和競爭的格局呢？那麼我們的競爭優勢是什麼？

These are very good questions. When it comes to foundation model in China, ERNIE 3.5 clearly stand out. People have witnessed the fast iteration and improvement over the past 5, 6 months. Our unique full-stack AI capabilities differentiate us from our competitors and give us an edge in the market. As mentioned in my prepared remarks, an IDC report recently published named ERNIE 3.5 as a leader across various assets. Like many other technologies, foundation model, speed of innovation depends on the application that uses the model. Baidu is an AI company with a strong portfolio of Internet products. These products are all being reviewed and reconstructed with ERNIE bot, therefore, drive the innovation of ERNIE into the right direction.

這些都是非常好的問題。當談到中國的基礎模型時，ERNIE 3.5 顯然脫穎而出。人們見證了這5、6個月的快速迭代和改進。我們獨特的全棧人工智能能力使我們有別於競爭對手，並賦予我們市場優勢。正如我在準備好的發言中提到的，IDC 最近發布的一份報告將 ERNIE 3.5 評為各種資產的領導者。與許多其他技術一樣，基礎模型、創新速度取決於使用該模型的應用程序。百度是一家人工智能公司，擁有強大的互聯網產品組合。這些產品都在通過ERNIE bot進行審核和重構，從而推動ERNIE的創新朝著正確的方向發展。

In other words, we know what kind of problem to solve. And I think many other peers don't really know they just open domain testing sets to evaluate the effectiveness of their models. We also have tens of thousands of cloud customers testing ERNIE bot. They provide valuable feedbacks that propel the improvement too. As for the industry-specific models you mentioned, they should be built upon the most powerful foundation model. I think that -- with time, foundation models rapidly evolve given its strong capabilities to learn new subjects and gain industry insights. And the stand-alone industry-specific models will have a hard time to keep up with the pace of innovation. In fact, since ERNIE 3.5 became available, an increasing number of customers have told us that ERNIE 3.5 is visibly more advanced than ERNIE 3.0 and it has helped them solve a growing number of pain points. And as you can imagine, we are working towards ERNIE 4.0 and should launch it by the end of the year.

換句話說，我們知道要解決什麼樣的問題。我認為許多其他同行並不真正知道他們只是開放域測試集來評估他們模型的有效性。我們還有數以萬計的雲客戶測試 ERNIE 機器人。他們提供了寶貴的反饋，也推動了改進。至於你提到的行業模型，應該是建立在最強大的基礎模型之上的。我認為，隨著時間的推移，基礎模型由於其學習新學科和獲得行業洞察的強大能力而迅速發展。而獨立的行業特定模型將很難跟上創新的步伐。事實上，自ERNIE 3.5推出以來，越來越多的客戶告訴我們，ERNIE 3.5明顯比ERNIE 3.0更先進，幫助他們解決了越來越多的痛點。正如您所想像的，我們正在努力實現 ERNIE 4.0，應該會在今年年底推出。

I believe that ultimately, only a selected few companies will reach this level of advancement for foundation models and Baidu will be one of them. During this transitional period, we are focused on multiple initiatives to drive the adoption of foundation model. We're working hard to build early powered applications and solutions for different industries and the scenarios, Baidu Comate is such an example. And with the upgrade to ERNIE 3.5, we are swiftly rolling out to empower enterprises to create industry-specific models and applications that tackle their own challenges. Also, we offer mass platform, which includes not only ERNIE but also a variety of models.

我相信最終只有少數公司能夠在基礎模型上達到這種進步水平，而百度將是其中之一。在此過渡期間，我們專注於多項舉措來推動基礎模型的採用。我們正在努力構建針對不同行業和場景的早期驅動的應用程序和解決方案，百度Comate就是這樣的例子。隨著 ERNIE 3.5 的升級，我們正在迅速推出，使企業能夠創建針對自身挑戰的行業特定模型和應用程序。另外，我們還提供海量平台，不僅包括ERNIE，還包括多種型號。

This allows businesses to easily build, fine tune and operate their own models using their own data. We provide a set of valuable tools on our platform, enabling our customers to easily enhance their model, training and application development. Of course, enterprises can directly access ERNIE's capabilities through API to enhance their businesses, recognizing that in the early stages enterprises prioritize security. So we do provide the flexibility of using our foundation model services on both public and private cloud.

這使得企業可以使用自己的數據輕鬆構建、微調和操作自己的模型。我們在我們的平台上提供了一套有價值的工具，使我們的客戶能夠輕鬆增強他們的模型、培訓和應用程序開發。當然，企業可以通過API直接訪問ERNIE的功能來增強其業務，認識到企業在早期階段優先考慮安全性。因此，我們確實提供了在公共雲和私有云上使用我們的基礎模型服務的靈活性。

Our self-developed, 4-layer AI architecture is our core competitive advantage because we deliver a better model performance when we serve our customers as shown in the testing phase over the past few months. Our strength testing, model training, efficiency and cost effectiveness in turn attract more enterprises to partner with us. So we gain more and more industry knowhow and insight and building and reinforcing positive cycle to further improve ERNIE. Our ultimate goal is to cultivate an AI-native ecosystem centered around ERNIE. We believe that the true power of foundation model lies in driving a wide array of high-quality AI native applications, much like an operating system. Some of the applications are built by us, while others were built by -- I would say, most will be built by our ecosystem partner to address industry-specific challenges. To enhance this ecosystem, we're happy to invest in other companies to complement our organic growth.

我們自主開發的四層人工智能架構是我們的核心競爭優勢，因為正如過去幾個月的測試階段所示，我們在為客戶服務時提供了更好的模型性能。我們的實力測試、模型訓練、效率和成本效益反過來又吸引了更多的企業與我們合作。因此，我們獲得了越來越多的行業知識和洞察力，並建立和強化良性循環，以進一步提高 ERNIE。我們的最終目標是培育一個以 ERNIE 為中心的 AI 原生生態系統。我們相信基礎模型的真正力量在於驅動各種高質量的人工智能本機應用程序，就像操作系統一樣。有些應用程序是由我們構建的，而其他應用程序是由我們構建的——我想說，大多數應用程序將由我們的生態系統合作夥伴構建，以解決特定行業的挑戰。為了增強這個生態系統，我們很高興投資其他公司來補充我們的有機增長。

Just as I mentioned in the prepared remarks, we hosted Baidu ERNIE Cup Innovation Challenge and large venture fund to support startup in developing all kinds of AI native applications. To sum up, we will continue to improve ERNIE, make ERNIE easy to use and help enterprises in any industry to not only retain or fine-tune models on top of ERNIE, but more importantly, leverage ERNIE and ERNIE bot to [give out] their own application. We aim to make ERNIE the preferred choice among AI development so that more and more applications will be built upon ERNIE and making our ecosystem vibrant. Thank you.

正如我在準備好的發言中提到的，我們舉辦了百度ERNIE杯創新挑戰賽和大型風險基金，以支持初創公司開發各種人工智能原生應用。綜上所述，我們將不斷完善ERNIE，讓ERNIE變得簡單易用，幫助任何行業的企業不僅可以在ERNIE之上保留或微調模型，更重要的是利用ERNIE和ERNIE bot【給出】他們自己的應用程序。我們的目標是讓 ERNIE 成為人工智能開發的首選，讓越來越多的應用基於 ERNIE 構建，讓我們的生態系統充滿活力。謝謝。

The next question comes from Miranda Zhuang with Bank of America.

下一個問題來自美國銀行的 Miranda Zhuang。

So lately, open source AI models are attracting significant market attention. So can management provide your insights into Baidu's perspectives on this front and the strategy regarding the open source versus the closed AI models?

最近，開源人工智能模型吸引了市場的廣泛關注。那麼，管理層能否向您介紹一下百度在這方面的觀點以及開源與封閉人工智能模型的策略？

Thank you, Miranda. This is a very interesting question. And I believe there are quite different views on this. I think both open source and closed source foundation models will coexist for well. In fact, actually, we have already seen many models trained on top of the open source foundation models powering tons of applications even today on our cloud platform. But it's really tough actually for our open source foundation models to keep evolving and getting better due to the lack of effective feedback loops, which play a super important role in improving the foundation models. And additionally, building and upgrading foundation models can be very expensive. So it is really important to build a durable business model to fund the sustainable improvement of the foundation models so that they can finally provide long-term value to the market.

謝謝你，米蘭達。這是一個非常有趣的問題。我相信對此有不同的看法。我認為開源和閉源基礎模型將永遠共存。事實上，我們已經看到許多模型在開源基礎模型之上進行訓練，即使在今天我們的雲平台上也為大量應用程序提供支持。但實際上，由於缺乏有效的反饋循環，我們的開源基礎模型很難不斷發展和變得更好，而反饋循環在改進基礎模型方面發揮著非常重要的作用。此外，構建和升級基礎模型可能非常昂貴。因此，建立一個持久的商業模式來資助基礎模型的可持續改進非常重要，這樣它們才能最終為市場提供長期價值。

(inaudible) is our priority that ERNIE keeps evolving quickly and remains the market leader, which can then attract more and more customers to use our platform to create (inaudible) apps and improve their business. With their feedback from the real-world scenarios, we can further improve our foundation models.

（聽不清）我們的首要任務是讓 ERNIE 不斷快速發展並保持市場領導者地位，這樣可以吸引越來越多的客戶使用我們的平台來創建（聽不清）應用程序並改善他們的業務。根據他們對現實場景的反饋，我們可以進一步改進我們的基礎模型。

Looking ahead, I believe that there will be a limited supply of advanced foundation models, whether open source or closed source or even industry-specific available in the market. So like we just talked, as the industry progresses, enterprises will need advanced models to develop more sophisticated applications. With ERNIE, we will be one of the few foundation models that can satisfy those evolving demands in the long run.

展望未來，我相信市場上的先進基礎模型的供應將會有限，無論是開源還是閉源，甚至是特定行業的模型。所以就像我們剛才講的，隨著行業的進步，企業將需要先進的模型來開發更複雜的應用。有了 ERNIE，我們將成為少數能夠長期滿足這些不斷變化的需求的基礎模型之一。

The next question comes from Alex Yao with JPMorgan.

下一個問題來自摩根大通的 Alex Yao。

I have a couple of questions on the margin outlook. Considering the opportunity of AIGC and the large language models, how should we think about the investment trajectory for the second half this year? Additionally, more -- once we start large-scale rollouts, what direct cost will be incurred? How should we compare the margin of ERNIE bot or large language model related to products -- related products than the existing business, i.e. Search, et cetera. More broadly, could you mention or provide directional color on the trend of Baidu's Core margins when we look into the second half of this year after the significant cost reduction, efficiency improvements incremented last year? What will be the key drivers of the profit moving forward?

我對利潤前景有幾個問題。考慮到AIGC和大語言模型的機會，我們應該如何看待今年下半年的投資軌跡？此外，更多的是，一旦我們開始大規模推廣，會產生哪些直接成本？我們應該如何比較 ERNIE 機器人或與產品相關的大型語言模型（相關產品）與現有業務（即搜索等）的利潤。更廣泛地說，在去年大幅降低成本、提高效率之後，當我們展望今年下半年時，您能否提及或提供有關百度核心利潤率趨勢的方向性信息？未來利潤增長的主要驅動因素是什麼？

Thank you, Alex. Let me clear your questions. This is Julius. I think previously, Robin has already talked about a lot of our opportunities of the ERNIE and ERNIE bot. So in the first place, I would like to reiterate that we are highly committed to the long-term investments in these promise areas. And to support the fast upgrade of ERNIE, we have invested in compensation infrastructures. If you look into our cash flow statement, you probably can see that the Baidu cost -- CapEx in Q2 have increased over last year. The increase is mainly due to the hardware purchase to support the (inaudible) of all AI campaigns such as ERNIE and ERNIE bots. But the impact on the income statement side, which is quite manageable, that's because of such hardware depreciations, in general will spread over the next few years and the impact on the near-term profitability is not substantial.

謝謝你，亞歷克斯。讓我來解答你的疑問。這是朱利葉斯。我想之前，Robin 已經談到了 ERNIE 和 ERNIE 機器人的很多機會。因此，首先，我想重申，我們高度致力於在這些有希望的領域進行長期投資。為了支持 ERNIE 的快速升級，我們投資了補償基礎設施。如果你查看我們的現金流量表，你可能會發現第二季度的百度成本——資本支出比去年有所增加。增加的主要原因是購買硬件以支持（聽不清）所有人工智能活動，例如 ERNIE 和 ERNIE 機器人。但由於硬件折舊，對損益表方面的影響是相當可控的，一般會在未來幾年內蔓延，對短期盈利能力的影響並不大。

The investment is expected to continue and the magnitude of the future investments will be highly correlated to the pace of the actual business expansions rather than only supporting the model training, which means that in the near future, the spending will be sponsored by the incremental revenue, which is generated from ERNIE or ERNIE bots and formulates our positive virtual circles. And regarding to the margin for the financial model and related products, I believe it's a little bit earlier to discuss at the current stage as the business model is still evolving. But as Robin has mentioned earlier, in part by the earnings, the search advertising could become more customized, which will result in increased ROI for advertisers.

預計投資將會持續，未來投資的規模將與實際業務擴張的節奏高度相關，而不僅僅是支持模型訓練，這意味著在不久的將來，支出將由增量收入來贊助，它是由ERNIE 或ERNIE機器人生成的，並製定了我們積極的虛擬圈子。至於金融模式和相關產品的利潤率，我認為現階段討論還為時過早，因為商業模式還在不斷發展。但正如羅賓之前提到的，部分通過收入，搜索廣告可能會變得更加定制，這將導致廣告商的投資回報率增加。

The additions for cloud services, as Dou has just talked about that, (inaudible) AI and the financial models will empower various industry and enhance efficiencies across different industries. So from a long-term perspective, we believe that the customers will be increasingly motivated to leverage our services to enhance their efficiencies, increasing our pricing power and resulting in higher margins as compared to the current cloud business. If we look into the second half of this year, for mobile ecosystem, we will continue to serve (inaudible) for the group in the long run, our goal for mobile ecosystem is to consistently achieve high margins. For the AI cloud side, we aim to achieve the profitability on a non-GAAP level and improve margins over time. For the intelligent driving, while we strongly believe that there's a huge long-term opportunities, we will continue to make sure we invest and measure pace.

雲服務的增加，正如竇剛談到的，（聽不清）人工智能和金融模型將為各個行業賦能，提高各個行業的效率。因此，從長遠來看，我們相信客戶將越來越積極地利用我們的服務來提高效率，提高我們的定價能力，從而獲得比當前云業務更高的利潤。如果我們展望今年下半年，對於移動生態系統，從長遠來看，我們將繼續為集團服務（聽不清），我們移動生態系統的目標是持續實現高利潤率。對於人工智能雲端，我們的目標是實現非公認會計準則水平的盈利能力，並隨著時間的推移提高利潤率。對於智能駕駛，雖然我們堅信存在巨大的長期機遇，但我們將繼續確保投資並衡量步伐。

As a whole, our main focus is on developing a sustainable growth strategy for each businesses, which prioritize the long-term thinking. In addition, we plan to invest in ERNIE and ERNIE bot to take advantage of the huge opportunities presented by the foundation models. Thank you, Alex.

總的來說，我們的主要重點是為每個企業製定可持續增長戰略，優先考慮長期思維。此外，我們計劃投資 ERNIE 和 ERNIE bot，以利用基礎模型帶來的巨大機遇。謝謝你，亞歷克斯。

The next question comes from Thomas Chong with Jefferies.

下一個問題來自 Jefferies 的 Thomas Chong。

I have 2 questions. The first is about our robotaxi business. Management mentioned that the unit economics in some cities are improving. Could management share the logic and the efforts taken behind it. What's your plan in terms of the city expansion and the volume market for fully driverless operations in the upcoming quarters? In addition, when can we expect RT6 vehicle to be launched? What's the projected size of the vehicle [fit] for this year? And how could it potentially impact the cost? My second question is on Auto Solutions. Which vehicle models will hit the role in the later half of this year and next year? And how should we size up the financial impact on the books?

我有 2 個問題。第一個是關於我們的機器人出租車業務。管理層提到，一些城市的單位經濟效益正在改善。管理層能否分享其背後的邏輯和努力？您在未來幾個季度的城市擴張和完全無人駕駛業務的銷量市場方面有何計劃？另外，RT6車輛預計什麼時候上市？今年車輛[適合]的預計尺寸是多少？它會對成本產生怎樣的潛在影響？我的第二個問題是關於汽車解決方案。今年下半年和明年哪些車型將發揮作用？我們應該如何評估對賬簿的財務影響？

Thanks for the question. This is Zhe. I will start from the road tax exception. Our autonomous driving (inaudible) is rapidly gaining traction in major cities, providing valuable data to the development of our driverless technology. This data is instrumental in enhancing the safety, efficiency and overall experience for our operation. As a result, we have guided a strong part from both customers and regulators, enabling us to expand into new locations and significant increase of rates. This positive feedback (inaudible) operations also drive the improvement of our model and the improved model drives the expansion of our operations, providing us to the forefront of the global leading (inaudible) autonomous driving technology. On the logic behind the UE improvement, here, I would like to take Wuhan's operation as example. We have continued to scale up our service in Wuhan in the past year.

謝謝你的提問。這是哲。我將從道路稅例外開始。我們的自動駕駛（聽不清）正在各大城市迅速獲得關注，為我們的無人駕駛技術的發展提供了寶貴的數據。這些數據有助於提高我們運營的安全性、效率和整體體驗。因此，我們得到了客戶和監管機構的大力指導，使我們能夠擴展到新的地點並大幅提高費率。這種正反饋（聽不清）的運營也推動了我們模型的改進，改進後的模型又推動了我們業務的擴展，使我們走在了全球領先（聽不清）自動駕駛技術的最前沿。關於UE改進背後的邏輯，這裡我想以武漢的操作為例。過去一年，我們繼續擴大在武漢的服務範圍。

If you compare with the situation 1 year ago, you may notice that firstly, our fully driverless fleet size has expanded significantly growing from 5 vehicles 1 year ago to almost 200 in August this year. Secondly, the operation area for our fully driverless system has expanded by around 15-fold in Wuhan. Meanwhile, the operation (inaudible) also has been further expanded, covering both (inaudible) morning and in the evening as well as later night operation. Certainly, (inaudible) becoming one of the largest areas of providing fully driverless ride-hailing service in the world. And firstly, in terms of the order, the proportion of fully driverless orders to all our operations has increased from 10% in last August to 55% in July this year.

如果與一年前的情況進行比較，你可能會注意到，首先，我們的無人駕駛車隊規模大幅擴大，從一年前的5輛增加到今年8月的近200輛。其次，我們的全自動無人駕駛系統在武漢的運行區域擴大了約15倍。同時，行動（聽不清）也進一步擴大，涵蓋（聽不清）早上和晚上以及深夜行動。當然，（聽不清）成為世界上提供完全無人駕駛乘車服務的最大領域之一。首先從訂單來看，完全無人駕駛訂單占我們全部業務的比例從去年8月的10%上升到今年7月的55%。

All the progress mentioned above contribute to the improvement of UE. Looking ahead, we will continue to focus on the operation in key cities and -- operation in regions like Beijing and Wuhan to further expand the fleet size and operation areas of driverless operations. And thus gradually improve the unit economics. Next year, we aim to enter into more cities to conduct fully driverless ride-hailing services and expand the skill of fully driverless commercial operations. Regarding RT6, the timeline for mass production is proceeding as planned. It brings us a significant cost advantage with mass production costs lowered by 50% compared with the (inaudible) generation. So it will be (inaudible) majority in our operation recovery, providing the unit economics closer to profitability point.

上述所有進展都有助於UE的改進。未來，我們將繼續聚焦重點城市和北京、武漢等地區的運營，進一步擴大無人駕駛車隊規模和運營區域。從而逐步提高單位經濟效益。明年，我們的目標是進入更多城市開展無人駕駛網約車服務，拓展無人駕駛商業運營能力。至於RT6，量產時間表正在按計劃進行。它為我們帶來了顯著的成本優勢，量產成本比（聽不清）一代降低了 50%。因此，這將是我們運營恢復的（聽不清）大部分，使單位經濟效益更接近盈利點。

Last, on auto solutions business, currently providing assistant driving product to not fully meet the standards in terms of generalization and safety, failing to satisfy consumer demand for (inaudible) communication in China's EV market has led to a general decline in the profitability within the automotive sector. And OEMs have been showing softened demand for intelligent driving and leading more towards cost cutting measures to the cumulated sales, which has affected and is also expected to (inaudible) auto solutions in the short term. However, we believe that our market opportunity ahead in the long run is driven by the consumer demand for intelligent driving. We plan to launch our safety navigation pilot product (inaudible) this year. As we look ahead, we believe the change in the auto industry is heading towards intelligent driving with exciting opportunities in the future, and we will capitalize on this change with cutting-edge technologies and (inaudible) business model. Thank you.

最後，在汽車解決方案業務上，目前提供的輔助駕駛產品在通用性和安全性方面還沒有完全達到標準，無法滿足中國電動汽車市場消費者對（聽不清）通訊的需求，導致整個行業的盈利能力普遍下降。汽車行業。原始設備製造商對智能駕駛的需求疲軟，並導致更多地採取削減累計銷量的成本措施，這已經影響並預計在短期內也會影響（聽不清）汽車解決方案。然而，我們相信，從長遠來看，我們未來的市場機會是由消費者對智能駕駛的需求驅動的。我們計劃今年推出安全導航試點產品（聽不清）。展望未來，我們相信汽車行業的變革正在朝著智能駕駛的方向發展，未來將帶來令人興奮的機遇，我們將通過尖端技術和（聽不清）商業模式來利用這一變化。謝謝。

This concludes our question-and-answer session and does conclude our conference for today. Thank you for participating. You may now disconnect.

我們的問答環節到此結束，我們今天的會議也到此結束。感謝您的參與。您現在可以斷開連接。