百度 (BIDU) 2023 Q3 法說會逐字稿

Hello, and thank you for standing by for Baidu's Third 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 年第三季財報電話會議。 （操作員說明）。今天的會議正在錄製中。 （操作員指令） 現在我想將會議交給今天會議的主持人，百度投資者關係總監林娟。

Hello, everyone, and welcome to Baidu's Third 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; and Dou Shen, our EVP in charge of Baidu AI Cloud Group ACG.

大家好，歡迎參加百度2023年第三季財報電話會議。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共同創辦人兼執行長李彥宏；羅蓉，我們的財務長；竇深，我們的執行副總裁，負責百度AI雲集團ACG。

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 provision of the U.S. Private 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.

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 年美國私人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。

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.

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聲明的義務。

Our earnings press release and this call include discussions of certain unaudited non-GAAP financial measures. Our press contains a reconciliation of 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。我們的新聞包含未經審計的非 GAAP 衡量標準與未經審計的最直接可比較的 GAAP 衡量標準的調整表，可在我們的 IR 網站 ir.baidu.com 上查看。提醒一下，本次會議正在錄製中。此外，本次電話會議的網路直播將在百度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執行長羅賓。

Hello, everyone. Baidu Core delivered solid revenue, profit and cash flow in Q3 despite navigating in a challenging macro climate for both our online marketing business and AI cloud business. I'm proud that our team managed to strengthen operational efficiency and maintain stable margins amidst a full-scale reinvention of our product portfolio with ERNIE and ERNIE bot.

大家好。儘管我們的線上行銷業務和人工智慧雲端業務面臨著充滿挑戰的宏觀環境，但百度核心在第三季仍實現了穩健的收入、利潤和現金流。我感到自豪的是，我們的團隊在利用 ERNIE 和 ERNIE 機器人全面重塑我們的產品組合的過程中，成功地提高了營運效率並保持了穩定的利潤。

Today, I would like to share an update on the new opportunities that ERNIE and ERNIE bot have opened up for us. After that, I will discuss some key highlights of each of our businesses.

今天，我想分享 ERNIE 和 ERNIE bot 為我們帶來的新機會的最新情況。之後，我將討論我們每項業務的一些關鍵亮點。

Presently, we are in the midst of a broad-based platform shift driven by generative AI and foundation models that is set to revolutionize every industry. On August 31, we received the approval to deploy ERNIE bot on a large scale and open ERNIE API to enterprise customers.

目前，我們正處於由生成人工智慧和基礎模型驅動的廣泛基礎的平台轉變之中，這將徹底改變每個產業。 8月31日，我們獲得大規模部署ERNIE機器人的批准，並向企業客戶開放ERNIE API。

Since then, we've witnessed a significant increase in queries handled by ERNIE bot and through ERNIE API. Moreover, we've received valuable feedback from the users and customers enabling us to further refine our model's performance.

從那時起，我們見證了 ERNIE 機器人和透過 ERNIE API 處理的查詢量顯著增加。此外，我們還收到了來自用戶和客戶的寶貴回饋，使我們能夠進一步完善模型的效能。

At Baidu World in October, we showcased our progress in ERNIE bot and AI native products. During that event, we introduced ERNIE 4.0 or EB4, our most advanced foundation model. We believe that EB4 is the GPT-4 level model, displaying human level performance in understanding content generation, complex reasoning and memory retention. These capabilities are crucial for developing AI native applications and solutions.

在10月份的百度世界上，我們展示了ERNIE機器人和AI原生產品的進展。在那次活動中，我們推出了 ERNIE 4.0 或 EB4，這是我們最先進的基礎模型。我們認為EB4是GPT-4層級的模型，在理解內容生成、複雜推理和記憶保留方面展現了人類層次的表現。這些功能對於開發人工智慧原生應用程式和解決方案至關重要。

We are pleased to launch EB4 earlier than our expectations. It resulted from our unique end-to-end 4-layer AI infrastructure, which helped enhance efficiencies in model training. The input and feedback from our users and customers also played a big role.

我們很高興比我們的預期更早推出 EB4。它源自於我們獨特的端到端 4 層人工智慧基礎設施，有助於提高模型訓練的效率。我們的用戶和客戶的意見和回饋也發揮了重要作用。

In products, as I said in the past, we continue to use ERNIE to reinvent our entire portfolio and introduce an AI-native experience. On the customer front, the ERNIE bot enables Baidu search by generating direct answers to search queries, complementing traditional search.

在產品方面，正如我過去所說，我們繼續使用 ERNIE 來重塑我們的整個產品組合併引入人工智慧原生體驗。在客戶方面，ERNIE 機器人透過產生搜尋查詢的直接答案來實現百度搜索，從而補充了傳統搜尋。

In the quarter, we initiated tests on our new features that recommend new feed-like information together with the generated search results and enable multi-round conversations to encourage further user expression. Our initial tests have received promising feedback. We believe these features will help deepen user engagement and prolong time spent, unleashing new monetization opportunities.

在本季度，我們啟動了對新功能的測試，這些新功能推薦新的類似提要的資訊以及產生的搜尋結果，並啟用多輪對話以鼓勵進一步的用戶表達。我們的初步測試收到了有希望的回饋。我們相信這些功能將有助於加深用戶參與度並延長用戶的使用時間，從而釋放新的獲利機會。

In particular, they benefit verticals like health care, education, travel, legal and auto, in which advertisers are willing to invest heavily in customer acquisition and reengagement. Ernie bot, our new AI native product, serves as a versatile multi-brand conversational AI assistant on both desktop and mobile. Given the exceptional performance of our large language model, we are confident in monetizing our services.

特別是，它們有利於醫療保健、教育、旅遊、法律和汽車等垂直行業，這些行業的廣告商願意在客戶獲取和重新參與方面投入大量資金。 Ernie bot 是我們新的 AI 原生產品，可作為桌面和行動裝置上的多功能多品牌對話式 AI 助理。鑑於我們的大型語言模型的卓越性能，我們有信心透過我們的服務獲利。

Starting from November 1, EB4 was open to the public through ERNIE bot at a subscription fee of about USD 8 per month. This marks us as the first company in China to implement user charges, distinguish us from other models in the market.

從 11 月 1 日開始，EB4 透過 ERNIE 機器人向公眾開放，訂閱費約為每月 8 美元。這標誌著我們成為中國第一家實施用戶收費的公司，使我們有別於市場上的其他機型。

Our primary focus is to encourage seamless collaboration between users and AI copilots, which we believe is a key trend in the new era. For example, with an AI co-pilot Baidu Wenku has transformed into a one-stop shop for various document creation needs. We have already seen an increase in the paying user count, a trend that we expect to continue in the coming quarters.

我們的主要重點是鼓勵用戶和人工智慧副駕駛之間的無縫協作，我們認為這是新時代的關鍵趨勢。例如，有了AI副駕駛，百度文庫已轉變為滿足各種文件創建需求的一站式商店。我們已經看到付費用戶數量的增加，我們預計這一趨勢將在未來幾季持續下去。

On the enterprise-facing product front, we recently introduced a GBI, generated business intelligence with ERNIE bot. GBI simplifies data analysis using natural language interaction, facilitating faster decision-making for business operation. The introduction of GBI was prompted by the recognition that customers across various industries have the need for AI copilots to help them analyze data more efficiently.

在以企業為導向的產品方面，我們最近推出了 GBI，透過 ERNIE 機器人產生商業智慧。 GBI透過自然語言互動簡化資料分析，促進業務營運更快決策。 GBI 的推出是因為我們意識到各行業的客戶都需要人工智慧副駕駛來幫助他們更有效地分析數據。

During our last earnings call, we also discussed how we use ERNIE bot to create Baidu Comate, our AI coding assistant and Infoflow, our enterprise communication and collaboration platform. These products focus on boosting productivity and efficiency gains and each of them present upsell opportunities for our cloud customers.

在我們上次的財報電話會議中，我們也討論瞭如何使用 ERNIE 機器人創建我們的人工智慧編碼助理百度 Comate 和我們的企業通訊和協作平台 Infoflow。這些產品專注於提高生產力和效率，每個產品都為我們的雲端客戶提供追加銷售機會。

In fact, an increasing number of our cloud customers in China's traditional industry and public sector have used the trial version and shown interest in this products and features. Additionally, these products and features also allow us to acquire new customers across an even wider array of industries.

事實上，越來越多的中國傳統產業和公共部門的雲端客戶已經使用了試用版，並對我們的產品和功能表現出了興趣。此外，這些產品和功能還使我們能夠在更廣泛的行業中獲得新客戶。

In terms of ecosystem, we empower enterprises to leverage ERNIE through API to create their own AI native applications and solutions that will drive the development of generative AI and LLM.

在生態系統方面，我們賦能企業透過API利用ERNIE創建自己的AI原生應用程式和解決方案，進而推動生成式AI和LLM的發展。

As more and more AI native applications built on top of ERNIE become successful, whether developed by us or by our customers, ERNIE will likewise be successful. Now over 10,000 enterprises are actively using ERNIE through API on a monthly basis. This number has been growing quickly since we received the regulatory green light at the end of August.

隨著越來越多基於 ERNIE 建構的 AI 原生應用程式取得成功，無論是我們還是我們的客戶開發的，ERNIE 也將同樣成功。現在每月有超過 10,000 家企業透過 API 積極使用 ERNIE。自從八月底我們獲得監管批准以來，這個數字一直在快速增長。

Currently, ERNIE is handling tens of millions of queries every day. Right now, a large and rising number of these queries come from the Baidu family of products as we have been pioneers in building AI native products and have put a lot of effort into reinventing our offerings.

目前，ERNIE 每天處理數千萬個查詢。目前，大量且不斷增加的此類查詢來自百度系列產品，因為我們一直是建立人工智慧原生產品的先驅，並投入了大量精力來重塑我們的產品。

In the first half of November, the number of daily external queries has increased by over 50% compared to the same period in October. As we are actively assisting our cloud customers in creating AI native applications, we believe there will be a continuous and significant rise in external queries in the future.

11月上半月，日均外部查詢量較10月同期成長超50%。由於我們正在積極協助雲端客戶創建人工智慧原生應用程序，我們相信未來外部查詢將會持續大幅成長。

We're also actively attracting developers to connect their information and services to ERNIE bot through plug-ins. With plug-ins, ERNIE can help people with more and more tasks, unlocking a wide range of possible use cases. As of today, hundreds of plug-ins have already been accessible to ERNIE. The initial batch of third-party plug-ins include ctrip.com, CITIC Press Group, China Justice Big Data Institute, New Oriental, Autohome and TreeMind.

我們也積極吸引開發者透過插件將他們的訊息和服務連接到 ERNIE 機器人。透過插件，ERNIE 可以幫助人們完成越來越多的任務，解鎖各種可能的用例。截至今天，ERNIE 已經可以使用數百個外掛程式。首批第三方外掛程式包括攜程網、中信報業集團、中國司法大數據研究院、新東方、汽車之家、TreeMind等。

In summary, during the quarter, we made significant progress in using gen AI to revolutionize product usage and transform business operations for our users and customers. We believe that this is just the beginning. In the future, we will realign resources to invest in this growth opportunity and shift away from lower priority efforts and improve efficiency for existing businesses, thus balancing investment and margins. We are excited about the possibilities for Baidu for our users, customers, partners and the entire ecosystem.

總而言之，本季度，我們在使用 gen AI 徹底改變產品使用方式並轉變用戶和客戶的業務運營方面取得了重大進展。我們相信這只是一個開始。未來，我們將重新調整資源，投資於此成長機會，從次要的工作轉向提高現有業務的效率，從而平衡投資和利潤。我們對百度為我們的用戶、客戶、合作夥伴和整個生態系統帶來的可能性感到興奮。

Now let me recap the key highlights of each of our businesses. Mobile ecosystem continued to exhibit steady growth for both user metrics and financial performance in the quarter. Baidu App's MAUs increased by 5% year-over-year to 663 million in September.

現在讓我回顧一下我們每項業務的主要亮點。本季行動生態系統的使用者指標和財務表現持續呈現穩定成長。 9 月份，百度應用程式的每月活躍用戶數年增 5%，達到 6.63 億。

Search queries and content distributed by Baidu App remained resilient. In particular, videos distributed by search and feed within Baidu App both experienced a double-digit growth in third quarter.

百度應用程式分發的搜尋查詢和內容保持彈性。其中，百度App內搜尋和資訊流分發的影片在第三季均出現兩位數成長。

Baidu Core's online marketing revenue increased by 5% year-over-year in the third quarter, consistently generating strong profit and cash flow for the group. This growth was driven by the continuous recovery in verticals such as health care and travel, among others.

百度核心第三季網路行銷營收年增5%，持續為集團帶來強勁的利潤和現金流。這一增長是由醫療保健和旅遊等垂直行業的持續復甦所推動的。

In the quarter, we continued to use gen AI to help advertisers increase ROI and conversion on our platform. Starting from September, advertisers can engage with our new marketing platform. This platform supports natural language input and multi-round conversations which help advertisers articulate their requirements more comprehensively, enabling us to formulate more effective campaign strategies for them.

本季度，我們繼續使用 gen AI 幫助廣告主提高平台上的投資報酬率和轉換率。從九月開始，廣告商可以使用我們的新行銷平台。該平台支援自然語言輸入和多輪對話，幫助廣告主更全面地表達他們的需求，使我們能夠為他們制定更有效的行銷策略。

Moreover, we made ongoing enhancements to our monetization system, focusing on improving targeting capabilities and the auction system. For example, Tarena Education, an IT professional education company, achieved an increase of 23.3% in conversion rate and 22.7% boost in ROI after using this enhanced platform and capabilities.

此外，我們不斷增強我們的貨幣化系統，重點是提高定位能力和拍賣系統。例如，IT 專業教育公司 Tarena Education 在使用這項增強的平台和功能後，轉換率提高了 23.3%，投資報酬率提高了 22.7%。

We are still in the early stages of using gen AI to help advertisers achieve higher conversions and ROIs on our platform. Our efforts will ultimately lead to significant improvements in monetization capabilities and contribute to future revenue growth.

我們仍處於使用 gen AI 幫助廣告主在我們的平台上實現更高轉換率和投資回報率的早期階段。我們的努力最終將導致貨幣化能力的顯著提高，並為未來的收入成長做出貢獻。

In the quarter, we also used our AI capabilities to help merchants grow their sales on Baidu. One example is how we help SMEs with live stream shopping. With ERNIE bot, we introduced a tool that allow them to easily create their own digital human, generate live scripts and more, significantly lowering the barrier and cost for live streamers to sell merchandise on Baidu.

本季度，我們也利用人工智慧能力幫助商家增加在百度的銷售額。一個例子是我們如何幫助中小企業進行直播購物。透過ERNIE bot，我們推出了一個工具，可以讓他們輕鬆創建自己的數位人、生成直播腳本等，大大降低了直播主在百度上銷售商品的門檻和成本。

Looking forward, we are optimistic that the growth of our online marketing revenue will continue to exceed China's GDP growth. At the same time, we will continue to test AI-native marketing products that could potentially open up more opportunities than traditional general search ads. This gives us confidence in Baidu's long-term online marketing growth prospects.

展望未來，我們樂觀地認為我們的網路行銷收入成長將持續超過中國GDP的成長。同時，我們將繼續測試人工智慧原生行銷產品，這些產品可能會比傳統的一般搜尋廣告帶來更多機會。這讓我們對百度的長期網路行銷成長前景充滿信心。

Turning to AI cloud. We continue to generate positive operating profit on a non-GAAP basis in the quarter as we remained focused on the healthiness of our business. Gen AI and LLM have brought us a lot of opportunities, which have strengthened our competitive advantages in cloud and increased our TAM.

轉向AI雲。由於我們仍然關注業務的健康發展，本季我們繼續在非公認會計原則的基礎上產生正的營業利潤。 Gen AI和LLM為我們帶來了很多機會，增強了我們在雲端方面的競爭優勢，也增加了我們的TAM。

A growing number of enterprises are using ERNIE API to develop their own AI native applications and solutions. We are also helping customers build their own models efficiently by leveraging our unique 4-layer AI infrastructure and our years of experience in building and using foundation models.

越來越多的企業正在使用ERNIE API來開發自己的AI原生應用程式和解決方案。我們也利用我們獨特的 4 層人工智慧基礎設施以及我們多年建立和使用基礎模型的經驗，幫助客戶有效地建立自己的模型。

However, training is very complicated. It requires a large number of GPUs working simultaneously. Any GPU failures can impact the entire process. We have developed ways to identify and address GPU failures quickly leading to a significant reduction in training costs.

然而，訓練是非常複雜的。它需要大量 GPU 同時工作。任何 GPU 故障都會影響整個過程。我們開發了快速識別和解決 GPU 故障的方法，從而顯著降低培訓成本。

Now about 98% of the training time on our platform is valid, setting an industry benchmark. We also have a set of different resources, including toolkits, data sets for enterprise customers to easily fine-tune their customized models.

現在我們平台上約98%的培訓時間是有效的，樹立了行業標竿。我們還擁有一系列不同的資源，包括工具包、資料集，讓企業客戶輕鬆微調其客製化模型。

Gen AI has helped us grow our cloud customer base. A large number of cloud customers using ERNIE API are new customers. At the same time, some of our existing cloud customers have increased their spending with us because of generative AI.

Gen AI 幫助我們擴大了雲端客戶群。大量使用ERNIE API的雲端客戶都是新客戶。同時，我們現有的一些雲端客戶由於生成式人工智慧而增加了在我們這裡的支出。

AI cloud revenues declined by 2% year-over-year in the third quarter, mainly due to the weak demand in smart transportation projects. We believe AI cloud revenue should rebound to positive growth in the fourth quarter, driven by the increasing momentum in generative AI-related businesses. Also, since smart transportation revenue started to slow down in Q4 of last year, we will have an easier year-over-year comp base in Q4 this year.

第三季AI雲營收年減2%，主要是因為智慧交通項目需求疲軟。我們認為，在生成型人工智慧相關業務成長動能的推動下，第四季人工智慧雲端收入應會反彈至正成長。此外，由於智慧交通收入在去年第四季開始放緩，今年第四季的年比比較基礎將更加輕鬆。

Moving on to intelligent driving. Our target remains unchanged, which is to achieve breakeven on the regional unit economics for robotaxi operation in a couple of years before turning operationally profitable. To this end, we are strategically concentrating our resources on pivotal regions.

邁向智能駕駛。我們的目標維持不變，即在幾年內實現機器人計程車營運區域單位經濟效益的收支平衡，然後再實現營運獲利。為此，我們正在策略性地將資源集中到重點地區。

Wuhan remains our largest operational area, and we believe it is also the largest region globally providing autonomous ride-hailing services currently covering a population of about 2.7 million. In the third quarter, the portion of fully driverless autos within the overall auto portfolio in Wuhan exceeded 40%. That's up from 35% in Q2.

武漢仍然是我們最大的營運區域，我們相信它也是全球提供自動駕駛叫車服務的最大地區，目前覆蓋人口約 270 萬人。第三季度，完全無人駕駛汽車在武漢汽車總量中的佔比超過40%。這比第二季的 35% 有所上升。

We are also particularly pleased to highlight that Apollo Go's operation in Wuhan continue to expand. In late August, Apollo Go remains the first company in China to provide autonomous ride-hailing services to the general public at Wuhan Tianhe International Airport, one of the busiest airports in Central China.

我們也特別高興地強調，Apollo Go 在武漢的業務不斷擴大。 8月下旬，Apollo Go成為中國第一家在華中地區最繁忙的機場之一武漢天河國際機場向大眾提供自動駕駛叫車服務的公司。

The extended reach into the airport transfer involves longer travel distances, presenting an excellent opportunity for the future improvement of unit economics. All of these developments contributed to the UE improvement, and we aim to reach regional UE breakeven in a couple of years.

機場接送範圍的擴大涉及更長的行駛距離，為未來提高單位經濟效益提供了絕佳的機會。所有這些發展都有助於 UE 的改善，我們的目標是在幾年內實現區域 UE 損益平衡。

In Q3, Apollo Go provided 821,000 rides to the public, marking a 73% increase year-over-year. And the cumulative order volume has surpassed 4.1 million by the end of Q3. As part of our executive reshuffle program, we have recently named Dr. Wang Yunpeng as Corporate VP of Baidu, who will lead the Intelligent Driving Group. Yunpeng has been with us since 2012 and has been responsible for autonomous driving business since 2018. I take great pride in seeing another business leader develop within Baidu. (inaudible) has taken a rotational position as CEO Assistant and the Chairman of the Technology Ethics Committee.

第三季度，Apollo Go 向公眾提供了 821,000 次乘車服務，年增 73%。截至第三季末，累計訂單量已超過410萬份。作為高階主管調整計畫的一部分，我們最近任命王雲鵬博士為百度公司副總裁，他將領導智慧駕駛事業群。雲鵬自2012年加入我們，並自2018年起負責自動駕駛業務。我非常自豪地看到百度內部又一位業務領袖成長。 （聽不清楚）輪流擔任執行長助理和技術道德委員會主席。

Now let's proceed with Rong's financial performance review.

現在讓我們繼續回顧榮的財務表現。

Thank you, Robin. Now let me walk through the details of our third quarter financial results. Total revenue was RMB 34.4 billion, increasing 6% year-over-year. Revenue from Baidu Core was RMB 26.6 billion, increasing 5% year-over-year. Baidu Core's online marketing revenue was RMB 19.7 billion, increasing 5% year-over-year. Baidu Core's non-online marketing revenue was RMB 6.9 billion, up 6% year-over-year. Revenue from iQIYI was RMB 8 billion, increasing 7% year-over-year.

謝謝你，羅賓。現在讓我詳細介紹一下我們第三季的財務表現。總收入為人民幣344億元，較去年同期成長6%。百度核心收入為人民幣266億元，較去年成長5%。百度核心網路行銷收入為人民幣197億元，較去年同期成長5%。百度核心非網路行銷收入為人民幣69億元，較去年同期成長6%。愛奇藝收入為人民幣80億元，較去年成長7%。

Cost of revenue was RMB 16.3 billion, which remained essentially unchanged compared to the same period last year. Operating expenses were RMB 11.9 billion, increasing 8% year-over-year primarily due to an increase in China spending, promotional marketing expenses, server depreciation expenses and the server custody fees which support ERNIE bot research inputs.

收入成本為人民幣163億元，與去年同期基本持平。營運費用為人民幣119億元，年增8%，主要是由於中國支出、促銷行銷費用、伺服器折舊費用以及支援ERNIE機器人研究投入的伺服器託管費的增加。

Baidu Core's operating expenses were RMB 10.5 billion, increasing 10% year-over-year. Baidu Core SG&A expenses were RMB 4.8 billion, increasing 14%, 1-4, year-over-year. SG&A accounted for 18%, 1-8, of Baidu's Core revenue in the quarter compared to 17%, 1-7, in the same period last year. Baidu Core R&D expenses were RMB 5.6 billion, increasing 7% year-over-year. R&D accounted for 21% of Baidu Core's revenue in the quarter, which maintained unchanged from the same period last year.

百度核心營運費用為人民幣105億元，較去年成長10%。百度核心SG&A費用為人民幣48億元，較去年成長14%（1-4）。本季度，SG&A 佔百度核心營收的 18%（1-8），而去年同期為 17%（1-7）。百度核心研發費用為56億元，年增7%。本季研發佔百度核心營收的21%，與去年同期持平。

Operating income was RMB 6.3 billion. Baidu Core's operating income was RMB 5.5 billion and Baidu Core's operating margin was 21%. Non-GAAP operating income was RMB 7.6 billion. Non-GAAP Baidu Core operating income was RMB 6.7 billion, and non-GAAP Baidu Core operating margin was 25%.

營業收入63億元。百度核心的營業收入為人民幣55億元，百度核心的營業利益率為21%。非公認會計準則營業收入為 76 億元。非 GAAP 百度核心營業收入為 67 億元，非 GAAP 百度核心營業利潤率為 25%。

Total other income net was RMB 1.9 billion compared to the total other loss net of RMB 4.8 billion for the same period last year, mainly due to the, first, a recognition of RMB 338 million gain versus RMB 3.1 billion loss for the same period last year from fair value change in long-term investments; and second, a decrease in impairment of long-term investments by RMB 1.4 billion.

其他淨收入總額為人民幣 19 億元，而去年同期其他虧損總額淨額為人民幣 48 億元，主要是由於首先確認了人民幣 3.38 億元的收益，而去年同期為人民幣 31 億元的虧損長期投資公允價值變動起始年份；二是長期投資減損準備減少14億元。

Income tax expenses was RMB 1.3 billion, increasing 41% year-over-year, primarily due to an increase in profit before tax. Net income attributable to Baidu was RMB 6.7 billion, and diluted earnings per ADS were RMB 18.22. Net income attributable to Baidu Core was RMB 6.4 billion, and net margin for Baidu Core was 24%.

所得稅費用為人民幣13億元，年增41%，主要是因為稅前利潤增加。歸屬於百度的淨利為人民幣67億元，攤薄後每股ADS收益為人民幣18.22元。歸屬於百度核心的淨利為人民幣64億元，百度核心淨利率為24%。

Non-GAAP net income attributable to Baidu was RMB 7.3 billion and non-GAAP diluted earnings per ADS were RMB 20.40. Non-GAAP net income attributable to Baidu Core was RMB 7 billion and Non-GAAP net margin for Baidu Core was 26%.

非 GAAP 歸屬於百度的淨利潤為人民幣 73 億元，非 GAAP 攤薄後每股美國存託憑證收益為 20.40 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 70 億元，非美國通用會計準則淨利率為 26%。

As of September 30, 2023, cash, cash equivalents, restricted cash and short-term investments were RMB 202.7 billion, and cash, cash equivalents, restricted cash and short-term investments, excluding iQIYI, was RMB 197.4 billion. Free cash flow was RMB 6 billion, and free cash flow, excluding iQIYI, was RMB 5.2 billion, Baidu Core had approximately 35,000 employees as of September 30, 2023.

截至2023年9月30日，現金、現金等價物、限制性現金及短期投資為人民幣2,027億元，現金、現金等價物、限制性現金及短期投資（不含愛奇藝）為人民幣1,974億元。自由現金流為人民幣60億元，自由現金流（不含愛奇藝）為人民幣52億元，截至2023年9月30日，百度核心約有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) Your first question comes from Alicia Yap with Citi.

（操作員說明）您的第一個問題來自花旗銀行的 Alicia Yap。

My question is on advertising. So it seems like Baidu ad revenue growth is tracking slower than some of the Internet peers, so besides macro, can management elaborate any other reasons that contributed to the softer ad revenue growth? And then looking into the fourth quarter, have you seen any demand picking up? What is the e-commerce sector contribution? And how will AI change the advertising outlook?

我的問題是關於廣告的。因此，百度廣告收入成長似乎慢於一些網路同行，那麼除了宏觀因素之外，管理階層能否詳細說明導致廣告收入成長疲軟的其他原因？然後展望第四季度，您是否看到需求有所回升？電商產業貢獻有多大？人工智慧將如何改變廣告前景？

Alicia, this is Robin. In Q3, apart from the macro weakness, online marketing revenue from e-commerce platforms was also relatively weak. Revenue from e-commerce platforms is one of our top revenue contributors, accounted for about 10% of our total online marketing revenue.

艾莉西亞，這是羅賓。第三季度，除了宏觀疲軟之外，電商平台的網路行銷收入也相對疲軟。來自電子商務平台的收入是我們最大的收入來源之一，約占我們在網路行銷總收入的10%。

Like many other Internet platform companies, we are building our own native e-commerce businesses. Revenue growth from our native e-commerce business is tracking very strong as we continue to improve the shopping experience on Baidu.

和許多其他網路平台公司一樣，我們正在打造自己的原生電商業務。隨著我們不斷改善百度的購物體驗，我們的本土電子商務業務的收入成長非常強勁。

I would like to highlight the strides we have made in our ad business through gen AI. We are basically restructuring the overall ad platform, including creative construction, ad targeting and the bidding investments. These efforts have started to pay off.

我想強調一下我們透過 gen AI 在廣告業務中取得的進步。我們基本上正在重建整個廣告平台，包括創意建立、廣告定位和競價投資。這些努力已經開始得到回報。

And the incremental revenue from this kind of initiatives are expected to reach the level of hundreds of millions RMB in the current quarter, which is Q4 of this year. And looking forward, we are optimistic that the growth of our online marketing revenue will continue to exceed China's GDP growth. Thank you.

而此類舉措的增量收入預計在本季（即今年第四季）達到數億元人民幣的水平。展望未來，我們樂觀地認為我們的網路行銷收入成長將持續超過中國的GDP成長。謝謝。

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 few questions on cloud revenue. I believe Robin mentioned despite of moderate revenue decline in 4Q, the cloud revenue will -- the growth rate will return to positive territory in Q4. And then from there, should we expect the cloud revenue to further accelerate into first half of 2024?

我有幾個關於雲端收入的問題。我相信 Robin 提到，儘管第四季營收略有下降，但雲端收入將在第四季恢復正成長。那麼從那時起，我們是否應該預期雲端收入在 2024 年上半年進一步加速？

With regard to the Smart City projects, are there any more projects that are still at risk? And then more importantly, as you guys start to monetize the AI capability, when will AI start contribute to the cloud revenue meaningfully? Lastly, any preliminary view on cloud revenue growth outlook for 2024?

關於智慧城市項目，還有哪些項目仍面臨風險？更重要的是，當你們開始將人工智慧能力貨幣化時，人工智慧何時開始對雲端收入做出有意義的貢獻？最後，對 2024 年雲端收入成長前景有何初步看法？

Alex, this is Dou. Thank you for your question. So actually, as we mentioned before, we have been focusing on improving the health of our business for sustainable development. And as a result, we have achieved non-GAAP operating profits in the past few quarters.

亞歷克斯，這是竇。謝謝你的問題。所以實際上，正如我們之前提到的，我們一直致力於改善業務的健康狀況以實現永續發展。因此，我們在過去幾季實現了非公認會計準則營業利潤。

As Robin already mentioned, due to the weak demand for intelligent transportation, cloud revenue experienced a slight decline in Q3. So while excluding smart transportation, the rest of our AI cloud business showed a pretty solid growth. And we believe AI cloud revenue will return to a plus growth in the fourth quarter and the trend will continue down the road.

正如Robin已經提到的，由於智慧交通需求疲軟，第三季雲端收入略有下降。因此，除了智慧交通之外，我們的其餘人工智慧雲端業務都呈現出相當穩健的成長。我們相信人工智慧雲端收入將在第四季度恢復正成長，並且這一趨勢將持續下去。

What is even more exciting side, we keep seeing new opportunities brought up by generative AI and large language models. Actually, last quarter, we already said that more and more customers across various sectors came to us for model training, application development and solution enhancement.

更令人興奮的一面是，我們不斷看到生成式人工智慧和大型語言模型帶來的新機會。實際上，上個季度我們已經說過，越來越多的各行業的客戶來找我們進行模型培訓、應用程式開發和解決方案增強。

Although the current revenue from generative AI and LLM related business is still very small, but it's growing very fast. We have seen more and more enterprises proactively adopting these new technologies for productivity and efficiency gain.

雖然目前來自生成式AI和LLM相關業務的收入仍然很小，但成長速度非常快。我們看到越來越多的企業主動採用這些新技術來提高生產力和效率。

Some of these customers, especially those from the Internet, education and the tech sectors, they have started to see efficiency gains through working with us. As a result, some of them have gradually increased their spending on our cloud services.

其中一些客戶，特別是來自互聯網、教育和科技領域的客戶，他們已經開始看到透過與我們合作提高了效率。因此，他們中的一些人逐漸增加了對我們雲端服務的支出。

Looking to Q4, we aim to leverage our leadership in generative AI and large language models to continuously attract new customers and encourage the existing customers to increase their spending on Baidu AI cloud. And we believe this should not only lead to long-term revenue growth, but also continuous margin improvement. Thank you, Alex.

展望第四季度，我們的目標是利用我們在產生人工智慧和大語言模型方面的領先地位，不斷吸引新客戶並鼓勵現有客戶增加在百度人工智慧雲端上的支出。我們相信這不僅會帶來長期的收入成長，還會帶來持續的利潤率改善。謝謝你，亞歷克斯。

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。

Congratulations on the results. My question is about ERNIE. So can management share with us the latest feedback for ERNIE 4 since the rollout last month and any color on the contract signed for adopting ERNIE 4? And also for consumer and -- how is the feedback after ERNIE bot started to charge an end user subscription fee? And lastly, among the various opportunities you mentioned, which one do you think can become the biggest revenue driver?

祝賀結果。我的問題是關於厄尼的。那麼管理層能否與我們分享自上個月推出以來 ERNIE 4 的最新反饋以及為採用 ERNIE 4 簽署的合約上的任何顏色？對於消費者來說，ERNIE 機器人開始收取最終用戶訂閱費用後的回饋如何？最後，在您提到的各種機會中，您認為哪一個可以成為最大的收入驅動力？

Miranda, let me answer your questions. Since the release of EB4 in mid-October, we're receiving positive feedback from both users and customers. Many enterprises have reached out to test EB4 and have been impressed with its capabilities.

米蘭達，讓我回答你的問題。自 10 月中旬發布 EB4 以來，我們收到了用戶和客戶的正面回饋。許多企業已經開始測試 EB4，並對其功能印象深刻。

EB4 has gained a reputation for advanced understanding and complex reasoning abilities. Comparing to EB 3.5 and other LLMs in the market, we have noted that EB4 generates more structured and clearer responses and excels in coding.

EB4 因其先進的理解力和複雜的推理能力而享有盛譽。與 EB 3.5 和市場上其他法學碩士相比，我們注意到 EB4 會產生更結構化、更清晰的答案，並且在編碼方面表現出色。

From November 1, we started to charging enterprises and end users for using EB4. And we've seen a growing number of customers and users willing to pay for its use. We're proud to be the first company to introduce GPT-4 level model in China. EB4 further widen our lead over other LLMs in the market. And we are the first LLM to charge end user fees that sets us apart from other peers.

從11月1日起，我們開始向使用EB4的企業和最終用戶收取費用。我們已經看到越來越多的客戶和用戶願意為其使用付費。我們很榮幸成為中國第一家引入 GPT-4 級別模型的公司。 EB4 進一步擴大了我們相對於市場上其他法學碩士的領先優勢。我們是第一個向最終用戶收取費用的法學碩士，這使我們有別於其他同行。

And regarding your question about monetization opportunity, we see significant opportunities in AI native applications either developed by Baidu or by our customers who leverage our AI capabilities.

關於你關於貨幣化機會的問題，我們在百度或利用我們的人工智慧能力的客戶開發的人工智慧原生應用程式中看到了巨大的機會。

If you look at our own products, we see significant opportunities in the new search and the revamped ad platform. The new search complements traditional search. It can address complex questions that were previously unanswerable. It also enables users to conduct a more personalized and in-depth research on various topics and projects.

如果你看看我們自己的產品，我們會在新的搜尋和改進的廣告平台中看到巨大的機會。新的搜尋是傳統搜尋的補充。它可以解決以前無法回答的複雜問題。它還使用戶能夠對各種主題和項目進行更個性化和深入的研究。

We will soon enable users to have multi-round conversation with us. As our search will be able to talk with users in natural language and in multi-round, it will create more potential on the commercial side too.

我們很快就會允許用戶與我們進行多輪對話。由於我們的搜尋將能夠以自然語言和多輪方式與用戶對話，因此它也將在商業方面創造更多潛力。

We are experimenting with a chatbot type ad product for SMEs and the brands. We believe this will not only help drive effective conversion, but also allow us to eventually transform from a CPC model to a CPS model. And at the same time, our capabilities will help our advertisers to better operate their business on Baidu.

我們正在為中小企業和品牌嘗試聊天機器人類型的廣告產品。我們相信這不僅有助於推動有效轉化，也能讓我們最終從CPC模式轉型為CPS模式。同時，我們的能力將幫助我們的廣告主更好地經營他們在百度的業務。

Our ongoing effort to revamp the ad platform have already shown positive results, and we will continue leveraging generative AI and to assist advertiser team achieving durable ROI growth on Baidu.

我們持續改善廣告平台的努力已經取得了積極的成果，我們將繼續利用生成式人工智慧，協助廣告客戶團隊在百度實現持久的投資報酬率成長。

In terms of empowering our customers with gen AI, as Dou just mentioned, customer needs are different now. Some customers still prefer to train their own model, but the GPU export restrictions will put a break on that.

在用新一代人工智慧賦能客戶方面，如竇剛所說，現在客戶的需求已經不同了。一些客戶仍然更喜歡訓練自己的模型，但 GPU 出口限制將打破這一點。

It will eventually become clear that training LLM from scratch is very difficult, especially when trying to achieve emergent abilities. So we will turn to advanced LLMs available on the market like ERNIE for devising applications.

最終我們會發現，從頭開始培訓法學碩士非常困難，尤其是在嘗試獲得新興能力時。因此，我們將轉向市場上提供的高級法學碩士（例如 ERNIE）來設計應用程式。

As customers become more advanced in using LLM to create applications and more AI native applications powered by ERNIE become more widely used, we should be able to see continuous revenue growth through model inferencing.

隨著客戶在使用 LLM 創建應用程式方面變得更加先進，以及更多由 ERNIE 支援的 AI 原生應用程式得到更廣泛的使用，我們應該能夠透過模型推理看到持續的收入成長。

Over the long term, inferencing should become a major source of revenue forward. Meanwhile, we will also help customers to fine-tune our existing model offerings to suit their customized needs in each scenario because our models are better, faster and more cost effective.

從長遠來看，推理應該成為未來的主要收入來源。同時，我們也將協助客戶微調我們現有的模型產品，以滿足他們在每種場景下的客製化需求，因為我們的模型更好、更快、更具成本效益。

So in summary, gen AI and LLM will bring us massive business opportunities. We have already made good progress in commercialization so far, and this is just the beginning of a promising future. Thank you.

所以綜上所述，gen AI和LLM將會為我們帶來龐大的商機。到目前為止，我們在商業化方面已經取得了良好的進展，而這只是一個充滿希望的未來的開始。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。

Can management share the latest advertiser feedback on the AI-powered ad system upgrade, and how do you think about the level of revenue boost to the core ads in 2024 as it gets rolled out to more -- even more advertisers?

管理階層能否分享廣告主對人工智慧廣告系統升級的最新回饋？隨著核心廣告向更多廣告主推廣，您如何看待 2024 年核心廣告的收入成長水準？

Yes, we are very happy with the rapid AI transformation of our ad system and thrilled by the positive feedback from our advertisers. Overall, I think advertisers appreciate our efforts to help them improve their ROIs on our platform. Also they are fond of our new features, which help them to be more productive.

是的，我們對廣告系統的快速人工智慧轉型感到非常高興，並對廣告商的正面回饋感到興奮。總的來說，我認為廣告商很欣賞我們為幫助他們提高平台投資報酬率所做的努力。他們也喜歡我們的新功能，這有助於他們提高工作效率。

As I mentioned in the prepared remarks, we've put a lot of effort into using gen AI and LLMs to reinvent our ad system over the past few quarters. Now we have an integrated advertiser-facing marketing platform. Advertisers can use it to generate creative advertising materials. These materials have proved to deliver higher conversion rates than materials created by humans.

正如我在準備好的發言中提到的，在過去的幾個季度中，我們投入了大量的精力來利用人工智慧和法學碩士來重塑我們的廣告系統。現在我們有一個面向廣告主的整合行銷平台。廣告商可以用它來產生創意廣告材料。事實證明，這些材料比人類創造的材料具有更高的轉化率。

And our platform also allows advertisers to engage in natural language. By interacting with advertisers in multiple rounds of conversation, our upgraded platform is able to better understand their intentions. This allows us to create campaign strategies that deliver higher ROI.

我們的平台也允許廣告商使用自然語言。透過與廣告主的多輪對話互動，我們升級後的平台能夠更了解他們的意圖。這使我們能夠制定可提供更高投資回報率的行銷策略。

Moreover, it significantly reduces the time that ad managers need to spend creating campaigns. Because even an experienced ad manager have to spend hours developing an advertising strategy. And now with an AI copilot, the process only takes like a few minutes.

此外，它還大大減少了廣告經理創建廣告活動所需的時間。因為即使是經驗豐富的廣告經理也必須花費數小時來制定廣告策略。現在有了人工智慧副駕駛，這個過程只​​需要幾分鐘。

As of today, we have a few thousand of advertisers already migrated to our new platform. While this number is relatively small compared to our 0.5 million advertiser base, it is certainly growing very fast.

截至今天，我們已經有數千名廣告商遷移到我們的新平台。雖然與我們 50 萬廣告客戶群相比，這個數字相對較小，但它的成長速度肯定非常快。

In addition, we continue to use AI to improve our bidding system and ad targeting capabilities. Such initiatives happened at the back end of the system, so advertisers may not directly perceive them, but they've observed improvements in their ad conversion and ROI.

此外，我們繼續使用人工智慧來改善我們的競價系統和廣告定位能力。此類舉措發生在系統後端，因此廣告主可能無法直接感知它們，但他們已經觀察到廣告轉換和投資報酬率的改善。

So on average advertisers using these capabilities probably achieved a high single-digit increase in conversions in Q3. All of our efforts should eventually attract advertisers to allocate more of their advertising budgets on Baidu.

因此，平均而言，使用這些功能的廣告商可能在第三季度實現了高個位數的轉換率成長。我們所有的努力最終應該會吸引廣告商在百度上分配更多的廣告預算。

As I previously mentioned, online marketing revenue related to our upgraded ad platform has been growing rapidly and already became meaningful. And this is just the beginning, as I said. We are experimenting with AI chatbot and chatbot could act as a replacement for landing page in the future. This is particularly useful in verticals where users typically research and engage in a long decision process before purchasing.

正如我之前提到的，與我們升級後的廣告平台相關的線上行銷收入一直在快速增長，並且已經變得有意義。正如我所說，這只是一個開始。我們正在試驗人工智慧聊天機器人，聊天機器人將來可以取代登陸頁面。這在用戶通常在購買前進行長期研究和決策過程的垂直行業中特別有用。

Imagine searching for a training program and being directed to a bot instead of a web page. With our AI chatbot, users can quickly learn about brand-specific information, product details and other stuff. Although -- I think that multi-round conversation is also very engaging. And for advertisers, it helps them to stay connected with potential customers and guide them at key decision-making points, leading to better conversion and even direct sales.

想像一下搜尋培訓計劃並被導向到機器人而不是網頁。透過我們的人工智慧聊天機器人，用戶可以快速了解品牌特定資訊、產品詳細資訊和其他內容。雖然——我認為多輪對話也很有吸引力。對於廣告商來說，它可以幫助他們與潛在客戶保持聯繫，並在關鍵決策點指導他們，從而實現更好的轉換甚至直接銷售。

We believe AI chatbot could work well with gen AI powered new search and bring us more opportunities. I mentioned earlier that the incremental revenue from these kind of initiatives are expected to reach the level of hundreds of millions of RMB this current quarter, Q4, and this is certainly growing very fast. The trend should continue and further strengthen in the year of 2024. Thank you.

我們相信人工智慧聊天機器人可以與人工智慧驅動的新搜尋很好地配合，並為我們帶來更多機會。我之前提到，此類舉措的增量收入預計將在本季（第四季）達到數億元的水平，而且成長速度肯定非常快。這一趨勢應該會在 2024 年繼續下去並進一步加強。謝謝。

The next question comes from Wei Xiong with UBS.

下一個問題來自瑞銀集團的熊偉。

I want to follow up on your cloud business. So could management share more color on how to think about the industry competitive landscape in China cloud market, especially among the Internet cloud vendors and as well as when competing with the telcos?

我想跟進你們的雲端業務。那麼管理階層能否分享更多關於如何看待中國雲端市場的產業競爭格局，特別是互聯網雲供應商之間以及與電信業者的競爭？

And also with the development in generative AI and the large language model, how do we assess our competitive advantage against peers? Do we expect the competition to intensify next year as other companies try to make efforts and catch up with us?

隨著生成式人工智慧和大語言模型的發展，我們如何評估我們相對於同行的競爭優勢？當其他公司努力追趕我們時，我們預計明年的競爭會加劇嗎？

Great question. This is Dou. As you actually already noticed, right, the traditional cloud business is slowing down while generative AI and large language models are siding in and reshaping the competitive landscape of the cloud business industry. In the past, right, the focus in the cloud market was actually on house, which is like a commodity and people are competing on pricing. But now with the rise of generative AI and the large language models, things are changing.

很好的問題。這是竇。正如您實際上已經注意到的那樣，傳統的雲端業務正在放緩，而生成式人工智慧和大型語言模型正在介入並重塑雲端業務行業的競爭格局。過去，雲端市場的焦點實際上是在房子上，它就像一種商品，人們在定價上競爭。但現在隨著生成式人工智慧和大型語言模型的興起，情況正在改變。

There's a growing interest among cloud customers coming to Baidu to utilize these sophisticated technologies to increase productivity and efficiency. They came to us not only because we have the most advanced AI technology, but also because we have experience and track record in using AI to help enterprises to solve problems.

雲端客戶越來越有興趣利用這些先進的技術來提高生產力和效率。他們來找我們，不僅因為我們擁有最先進的人工智慧技術，還因為我們有利用人工智慧幫助企業解決問題的經驗和記錄。

There are some of them who are still in the product experimental stages, but they had firm belief in the new technology to rebuild their products and services because they have seen successful stories overseas. That is why we are seeing the new technology is increasing our time and expanding our competitive edge.

其中有些還處於產品實驗階段，但他們堅信新技術可以重建他們的產品和服務，因為他們看到了海外的成功案例。這就是為什麼我們看到新技術正在增加我們的時間並擴大我們的競爭優勢。

So as Robin mentioned, EB4 is China's first GPT-4 style model. We also shared the positive initial feedback we had garnered for EB4. So currently, our team are engaged in dialogues with our clients, assisting them in signing the technology and utilizing ERNIE to redevelop their existing products and create new ones.

如同Robin所提到的，EB4是中國第一個GPT-4風格的模型。我們也分享了我們為 EB4 獲得的正面的初步回饋。目前，我們的團隊正在與客戶進行對話，協助他們簽署技術並利用 ERNIE 重新開發現有產品並創建新產品。

So I can say that ERNIE has already helped us attract new customers and additional IT spending from existing customers. So here, I would like to briefly bring up 2 points for our advantage compared to the players in the market.

所以我可以說 ERNIE 已經幫助我們吸引了新客戶並吸引了現有客戶的額外 IT 支出。所以這裡我想簡單提一下我們相對於市場上的廠商的2點優勢。

The first one is our unique 4-layer AI infrastructure, which gives us the flexibility to make adjustments or innovations at every layer to be able to be compatible with other leaders to keep driving efficiency in both model training and inference.

第一個是我們獨特的四層人工智慧基礎設施，它使我們能夠靈活地在每一層進行調整或創新，以便能夠與其他領先者相容，從而保持模型訓練和推理的效率。

And the second one, more specifically, is our capability to develop GPU networks for clusters for large language model training. As Robin just said, 98% of the training time on our AI infrastructure is valid. As a result, our customers, including several leading Internet and tech companies are increasing their investments in our service.

更具體地說，第二個是我們為大型語言模型訓練的叢集開發 GPU 網路的能力。正如Robin剛才所說，我們AI基礎設施上98%的訓練時間都是有效的。因此，我們的客戶，包括幾家領先的網路和科技公司，正在增加對我們服務的投資。

Furthermore, we will continue to leverage our unique advantage of AI architecture to drive efficiency gains. It will help us to greatly reduce costs in model training and inference on our cloud, giving us the flexibility to offer more compelling prices to our customers and further strengthen our competitive edge in the market.

此外，我們將持續利用人工智慧架構的獨特優勢來推動效率提升。它將幫助我們大幅降低雲端模型訓練和推理的成本，使我們能夠靈活地為客戶提供更具吸引力的價格，並進一步增強我們在市場上的競爭優勢。

Regarding the competition from telecom operators, I would like to highlight our focus is on different market segments since we differentiate ourselves with our AI capabilities, particularly ERNIE as we have mentioned. At least worth noting that we can cooperate and we are actually cooperating on many projects.

關於來自電信營運商的競爭，我想強調我們的重點是不同的細分市場，因為我們透過人工智慧能力來區分自己，特別是我們提到的 ERNIE。至少值得注意的是，我們可以合作，而且我們實際上在許多專案上進行合作。

As for other Internet companies in China, so our strong AI capabilities and ERNIE are well recognized by market, which will set us apart from our peers. To sum up, we believe that our strong AI capabilities and particularly in generative AI and large language models will allow us to eventually become the end market leader and gain share in the cloud market.

對於中國的其他網路公司來說，我們強大的AI能力和ERNIE得到了市場的認可，這將使我們在同行中脫穎而出。綜上所述，我們相信，我們強大的人工智慧能力，特別是在生成式人工智慧和大型語言模型方面，將使我們最終成為終端市場的領導者，並在雲端市場中獲得份額。

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 also about ERNIE. So given the successful upgrade of ERNIE 4.0, what would be the future strategy for model iteration to solidify our tech leadership? So do we foresee any competition in the foundation model in the industry, either to stabilize or intensify in the future?

所以我的問題也是關於厄尼的。那麼隨著ERNIE 4.0的成功升級，未來我們會採取什麼樣的模型迭代策略來鞏固我們的技術領先地位呢？那麼，我們預期未來產業內基礎模型的競爭會趨於穩定還是加劇？

Lincoln, the AI chips we have in hand already allow us to launch EB4. We're ahead of the competition. To take our lead in LLMs to the next level, we will take an application-driven approach. We will let the AI native apps tell us what to improve in ERNIE bot capabilities.

林肯，我們手上的AI晶片已經可以讓我們推出EB4了。我們在競爭中處於領先地位。為了將我們在法學碩士領域的領先地位提升到一個新的水平，我們將採取應用程式驅動的方法。我們將讓 AI 本機應用程式告訴我們 ERNIE 機器人功能需要改進哪些方面。

Given that there are only a very limited number of AI native apps on the market right now, the majority of ERNIE API cost are from internal apps, are internal apps like search, ads, Wenku, et cetera. The rebuilding and restructuring of our existing products drive ERNIE innovation in the right direction.

鑑於目前市場上的 AI 原生應用程式數量非常有限，ERNIE API 的大部分成本都來自內部應用，例如搜尋、廣告、文庫等內部應用程式。我們現有產品的重建和重組推動 ERNIE 創新朝著正確的方向發展。

What is equally important is that we are helping enterprises use ERNIE to build their offerings. And we have seen that over 10,000 enterprises are using ERNIE through API costs on a monthly basis, which propels ERNIE's improvement, too.

同樣重要的是，我們正在幫助企業使用 ERNIE 來建立他們的產品。我們看到每月有超過10,000家企業透過API費用使用ERNIE，這也推動了ERNIE的改進。

We also continue to improve the efficiency of our models. For example, compared to the ERNIE bot version in March, inference cost of the current version has been reduced by 98%, basically resulting in a 50x increase in QPS for the same amount of the hardware operating power.

我們也持續提高模型的效率。例如，與 3 月的 ERNIE bot 版本相比，目前版本的推理成本降低了 98%，基本上實現了相同硬體運算能力下 QPS 的 50 倍提升。

We are also able to do this using our unique 4-layer architecture and leveraging our ability to do end-to-end optimization. Continued inference cost reduction has further strengthened our model's competitive advantage, and it gives us the flexibility to offer more and more compelling presence.

我們還能夠使用我們獨特的 4 層架構並利用我們進行端到端優化的能力來做到這一點。推理成本的持續降低進一步增強了我們模型的競爭優勢，並使我們能夠靈活地提供越來越引人注目的存在。

From a long-term perspective, taking into account factors such as the scarcity of high-performance chips, high demand for data, AI talents and the huge upfront investments, the industry will soon translate into a consolidation stage. We believe there will only be a select few foundation models in the market and Baidu will certainly be one of them.

從長遠來看，考慮到高效能晶片的稀缺性、對數據、AI人才的高需求以及龐大的前期投資等因素，產業很快就會進入整合階段。我們相信市場上只會有少數幾種基礎模型，而百度肯定是其中之一。

In this stage of industry development, more and more enterprises will begin to leverage advanced foundation models like ERNIE to create AI native products rather than spending resources on building their own large language models. So we expect that the number of native apps based on ERNIE will reach millions in the future.

在這個產業發展階段，越來越多的企業將開始利用ERNIE等先進的基礎模式來打造AI原生產品，而不是花費資源建構自己的大型語言模式。所以我們預計未來基於ERNIE的原生應用數量將達到數百萬。

The next question comes from James Lee with Mizuho.

下一個問題來自瑞穗的詹姆斯李。

Can you guys maybe quantify the investments related to AI and how that affects various cost items in your P&L? And should we expect these investments to accelerate over the next few quarters? I was thinking especially at the launch of ERNIE 4.0 and potentially higher inference costs as more people are using it.

你們能否量化與人工智慧相關的投資以及它如何影響損益表中的各種成本項目？我們是否應該預期這些投資將在未來幾季加速？我特別在 ERNIE 4.0 推出時想到，隨著越來越多的人使用它，推理成本可能會更高。

And then if we extrapolate that over a longer term, how should we think about Baidu Core OPM over the next few years, given all the moving parts, including revenue shift, investment in AI and also your continued improvement in cloud profitability?

然後，如果我們從長遠來看，考慮到所有的變化因素，包括收入轉移、人工智慧投資以及雲端獲利能力的持續改善，我們應該如何看待未來幾年的百度核心 OPM？

James, let me take your questions. This is Julius. Currently, the primary investments for generative AI and large language models are centered around the computing power, which is recorded as part of CapEx. I think in the past few quarters, we have put a lot of chips resources to training our new ERNIE models.

詹姆斯，讓我回答你的問題。這是朱利葉斯。目前，生成式人工智慧和大型語言模型的主要投資集中在運算能力上，這被記錄為資本支出的一部分。我認為在過去的幾個季度中，我們投入了大量的晶片資源來訓練我們的新 ERNIE 模型。

And in the future, as more AI native applications which is powered by our ERNIE become more widely used, we should also put more resources in small imported chips. However, please note that all of this impact to the AI-related hardware investments is quite manageable because all the hardware depreciation are spread out over a few years.

未來，隨著我們ERNIE驅動的AI原生應用越來越廣泛，我們也應該把更多的資源投入到小型進口晶片上。然而，請注意，所有這些對人工智慧相關硬體投資的影響都是可以控制的，因為所有硬體折舊都分散在幾年內。

For example, all expenses linked to the coding power we used in the training ERNIE are recorded through R&D depreciations. And the model inferencing projects which is highly related to the usage of the model either internally or externally, and it should be supporting the funding by the future developments.

例如，與我們在訓練 ERNIE 中使用的編碼能力相關的所有費用都透過研發折舊記錄。而模型推理項目，無論是在內部還是在外部，都與模型的使用高度相關，應該由未來的發展提供資金支持。

And moreover, we're happy to see that our investment in generative AI and large language models are beginning to bear fruit. As Robin has mentioned just earlier, since we're receiving the approval from regulatory and more additional revenue generated from ERNIE powered by (inaudible) businesses has been growing quite fast.

此外，我們很高興看到我們在產生人工智慧和大型語言模型方面的投資開始取得成果。正如 Robin 之前提到的，自從我們獲得監管機構的批准以來，由（聽不清楚）業務支持的 ERNIE 產生的更多額外收入一直在快速增長。

While we are using the generative AI and large language models to renovate our businesses, we are still keeping a close eye on making sure our Baidu Core earnings stay solid. In Q3, we can see that mobile ecosystem continued its high margin, ensuring a very strong generation of cash flow. And AI cloud businesses continued its healthy growth and achieved profitability one more time.

在我們使用生成式人工智慧和大型語言模型來革新我們的業務的同時，我們仍然密切關注確保我們的百度核心收入保持穩定。在第三季度，我們可以看到行動生態系統繼續保持高利潤率，確保了非常強勁的現金流產生。 AI雲端業務持續健康發展，再次獲利。

And look ahead, we expect the traditional cloud business to remain quite profitable and the new opportunity arising from generative AI and large language models are also expect to have favorable margin in the long term. For intelligent driving businesses, our long-term growth opportunity will continue to invest with a mature pace.

展望未來，我們預計傳統雲端業務將保持相當的獲利能力，而生成式人工智慧和大型語言模式帶來的新機會也有望在長期內獲得有利的利潤率。對於智慧駕駛業務，我們的長期成長機會將繼續以成熟的步伐進行投資。

And all-in-all, we will concentrate our resources by reallocating them from noncore businesses to AI-related businesses. All of these will be quite beneficial for our long-term growth. Thank you, James.

總而言之，我們將把資源從非核心業務集中到人工智慧相關業務。所有這些都對我們的長期發展非常有利。謝謝你，詹姆斯。

The next question comes from Thomas Chong with Jefferies.

下一個問題來自 Jefferies 的 Thomas Chong。

Congratulations on a solid set of results. My question is on the chip side. Can management comment about the impact on AI development after the further restriction of the chip export from the U.S.? How does that affect our AI product offerings and user experience if any?

恭喜您取得了一系列紮實的成果。我的問題是在晶片方面。管理階層能否評論美國進一步限制晶片出口對人工智慧發展的影響？這對我們的人工智慧產品和使用者體驗（如果有）有何影響？

Yes, the restrictions on the chip export to China actually have limited impact on Baidu in the near term. We have successfully launched EB4 in mid-October, our most advanced foundation model in China. It is a milestone for us.

是的，對中國晶片出口的限制實際上短期內對百度的影響有限。我們在10月中旬成功推出了EB4，這是我們在中國最先進的基礎模式。這對我們來說是一個里程碑。

And as I just said earlier, we have a substantial reserve of AI chips, which can help us keep improving ERNIE bot for the next year or 2. Also inference requires less powerful chips, and we believe our chip reserves as well as other alternatives will be sufficient to support a lot of AI native apps for the end users.

正如我剛才所說，我們擁有大量的人工智慧晶片儲備，這可以幫助我們在未來一兩年內不斷改進 ERNIE 機器人。此外，推理需要功能較弱的晶片，我們相信我們的晶片儲備以及其他替代方案將足以支援最終用戶的許多人工智慧本機應用程式。

And in the long run, having difficulties in acquiring the most advanced chips inevitably impacts the pace of AI divestment in China. So we are proactively seeking alternatives.

從長遠來看，取得最先進晶片的困難不可避免地會影響中國人工智慧撤資的步伐。因此，我們正在積極尋找替代方案。

While these options are not as advanced as the best chips in the U.S., our unique 4-layer AI architecture and strength in AI algorithm will continue to help us improve efficiency and mitigate some of these challenges. For example, we have made some innovations in PaddlePaddle, our deep learning framework, and ERNIE bot, our foundation model, to allow them to be better compatible with different types of AI chips on both model training and inference tasks.

雖然這些選項並不像美國最好的晶片那麼先進，但我們獨特的 4 層人工智慧架構和人工智慧演算法的優勢將繼續幫助我們提高效率並緩解其中一些挑戰。例如，我們對深度學習框架PaddlePaddle和基礎模型ERNIE bot進行了一些創新，使它們在模型訓練和推理任務上能夠更好地相容於不同類型的AI晶片。

But given that all the other Chinese companies face the same challenge, we believe we are actually best positioned to serve this market. As you probably know, in the past, some of our peers, they try to ride on the gen AI wave by investing in those startups to train foundation models. And they basically sell the computing power to those start-ups. We didn't do that.

但考慮到所有其他中國公司都面臨同樣的挑戰，我們相信我們實際上最有能力服務這個市場。你可能知道，過去，我們的一些同行試圖透過投資這些新創公司來訓練基礎模型，從而順應人工智慧浪潮。他們基本上將計算能力出售給那些新創企業。我們沒有那樣做。

We try to optimize everything from the infrastructure layer to framework layer and to model layer and to apps. So we've invested in this kind of end-to-end optimization approach. Therefore, we can -- for the same amount of computing power, we can do training more efficiently, more cost effectively and we can do inferencing faster and cheaper.

我們嘗試優化從基礎設施層到框架層、模型層和應用程式的所有內容。因此，我們投資了這種端到端優化方法。因此，對於相同的運算能力，我們可以更有效、更經濟地進行訓練，並且可以更快、更便宜地進行推理。

And as time pass by, I think more and more company will realize that they don't need to train their foundation models. They just need to develop AI native apps based on Baidu's foundation model, which is the best on the market.

隨著時間的推移，我認為越來越多的公司會意識到他們不需要訓練他們的基礎模型。他們只需要基於百度的基礎模型開發人工智慧原生應用程序，這是市場上最好的。

So I'm really happy that we basically invested on this kind of end-to-end optimization front for many, many years. And it's time for us to show that the investment is worth it. Thank you.

所以我真的很高興我們多年來基本上在這種端到端優化方面進行了投資。現在是我們證明投資值得的時候了。謝謝。

Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect.

女士們、先生們，今天的會議到此結束。感謝您的參與。你們都可以斷開連線。