When will the wind of large models blow up Baidu's stock price?

Since Baidu launched ERNIE Bot in March 2023, the company's stock price has experienced a roller-coaster ride. We previously analyzed:

1) Initially, ERNIE Bot had a very obvious effect on boosting Baidu's valuation. In the second quarter, the stock price outperformed mainstream Chinese internet companies, and the market was positive about the business;

2) Subsequently, Baidu was affected by factors such as sensitive information in foreign media, causing violent fluctuations in the stock price.

When discussing the ups and downs of Baidu's stock price in 2023, it cannot be solely attributed to ERNIE Bot's "underperformance" but rather multiple reasons.

Recently, Baidu and Robin Li have been emphasizing "the future without programmers." At today's Create 2024 conference, Robin Li also stated that "natural language will become the new universal programming language" and believes that "in the context of large models, open source is the most expensive." Why is that?

1) Fundamentally, Baidu is still a platform company. The value of large models is not only about exploring cutting-edge technology but also about reshaping the value of the platform. If "natural language becomes the new universal programming language," it will improve search and lower the threshold for customers. The question of whether there will be programmers in the future is actually a false proposition. What Baidu needs to do is to platformize simple programming and make customer behavior more closely related to Baidu;

2) As for open source or closed source, different technical schools have different opinions. Objectively speaking, open source aligns more with the spirit of internet collaboration, but it comes with high costs, high investment, and slow iteration efficiency. Closed source means a single company dominates the entire model, with high controllability and low costs, but it does not quite align with the open spirit of the internet over the past 20 years;

3) Baidu's choice of technical path must ultimately be proven by performance, and all of this needs to be reflected in the stock price. ERNIE Bot has been around for over a year. So far, user data and operational data are acceptable, but its impact on the group's financial reports has yet to be released. The above discussion on the model will determine whether it can be demonstrated in future performance.

The market is really a bit impatient.

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