Baidu's Market Value Plummets By $2.4 Billion Following CEO's Absence From Crucial Meeting Led By Chinese President Xi

On Monday, the Hong Kong-listed shares of Baidu BIDU took a nosedive by 7%, wiping out $2.4 billion from the company’s market value. This sharp decline came in the wake of the company founder’s noticeable absence from a pivotal meeting with President Xi Jinping.

What Happened: President Xi had called a meeting in Beijing with top Chinese business leaders, including Alibaba BABA founder Jack Ma and Huawei’s Ren Zhengfei. However, Reuters reported that Baidu’s founder, Robin Li, was not present at the meeting. The meeting with Xi was perceived as a sign of the government’s backing for China’s tech sector amid years of regulatory scrutiny and uncertain U.S. relations.

Meanwhile, Baidu announced on Sunday, its plans to integrate both DeepSeek and its proprietary Ernie large language models (LLMs) into its search engine to provide a more diverse search experience following rival Tencent’s TCEHY declaration that they would integrate DeepSeek's AI model into WeChat search.

Why It Matters: Last week, Baidu’s shares surged nearly 12%, fueled by excitement over China’s advancements in AI and the earlier launch of DeepSeek R1. Seizing the moment, the company unveiled an upgraded version of its Ernie AI bot and revealed plans to open-source its AI models. The recent losses are largely attributed to profit-taking following the AI-driven rally. The company is also scheduled to release its fourth-quarter earnings on Feb. 18.

However, Li’s absence has led to speculation about Baidu’s waning influence in the market. The company has been struggling with declining ad revenue, while its cloud division has experienced limited growth despite expanding its AI offerings over the past two years.

Baidu’s recent stock market performance comes amid a broader context of the company’s efforts to stay competitive in the AI market. Baidu is preparing to launch its next-generation AI model, Ernie 5.0, later this year to compete with new entrants like DeepSeek.

Furthermore, Baidu’s CEO has emphasized the importance of continued investment in AI, despite the cost-effectiveness of AI models like DeepSeek. At the World Government Summit in Dubai, Robin Li highlighted the need for more investment to develop smarter models.