Baidu's DAA metric reveals AI revenue hits 52% as profit plunges 55%

At the Baidu Create 2026 conference in May, founder Robin Li unveiled a new metric—Daily Active Agents (DAA)—to gauge AI platform health, arguing that tokens measure cost, not value. The announcement came as Baidu reported Q1 2026 earnings where AI business revenue hit 13.6 billion yuan, now 52% of general business revenue and surpassing traditional online marketing (12.6 billion yuan, down 22% YoY). However, net profit attributable to shareholders fell over 55% to 3.4 billion yuan, highlighting the cost of this structural shift. Despite early investments in large models, Baidu's Wenxin app has dropped out of the top 10 domestic AI-native apps, with ByteDance's Doubao (345M MAU), Alibaba's Qwen (166M MAU), and DeepSeek (127M MAU) dominating the market.

Industry observers note Baidu's strategic conservatism may be holding it back. The company chose a closed-source path from the start, which limited ecosystem growth compared to open-source competitors. Internal coordination challenges persist, with overlapping product lines and resources scattered across departments. In response, Baidu has reorganized its Mobile Ecosystem Group (MEG), integrating the Wenxin app more closely with Baidu Search and Baidu Library. The introduction of DAA represents an attempt to reframe the conversation around agent effectiveness, but critics argue it's a narrative shift rather than a technical breakthrough. Baidu now faces the pressure of using declining advertising profits to fund AI growth while competing against faster-moving rivals.