Baidu, the well-known Chinese search engine company, faced a major stock drop on Monday, causing it to lose $2.4 billion in market value.
According to Reuters, this happened after Baidu’s founder, Robin Li, was not seen at an important meeting in Beijing with China’s President, Xi Jinping, and other business leaders.
The meeting included famous names like Alibaba’s Jack Ma and Huawei’s Ren Zhengfei, but Robin Li’s absence raised concerns among investors.
Reuters reported that Baidu’s shares fell by as much as 8.8% before slightly recovering to end the day with a 7% loss.
The company’s total market value is now about HK$252.05 billion ($32.4 billion). It was the biggest loser on both the Hang Seng Index and the Hang Seng Tech Index.
Experts told Reuters that big investors always watch closely to see which business leaders attend such high-level meetings.
If a CEO is missing, people might think the company has lost influence or is facing problems. A sales director at a brokerage firm, who spoke to Reuters, said that missing this meeting might mean Baidu is not as important in China’s tech industry as it used to be.
Another reason for Baidu’s stock drop, as Reuters explained, was its decision to fully connect its search engine to an AI start-up called DeepSeek and its own AI model, Ernie.
Some experts believe this move suggests Baidu is struggling to stay ahead in artificial intelligence (AI) competition.
Even though Baidu was one of the first Chinese companies to release a chatbot similar to OpenAI’s ChatGPT, newer companies like DeepSeek might be catching up.
According to Reuters, the meeting with Xi was a signal that the Chinese government is supporting its tech sector again after years of strict regulations.
China wants to boost economic growth and deal with its complex relationship with the United States.
Baidu is trying to grow its AI business because it still relies heavily on ads from its search engine, as Reuters pointed out.
The company launched its Ernie AI model in 2023 and claims its latest version, Ernie 4.0, is just as advanced as OpenAI’s GPT-4. However, as Reuters noted, investors seem to worry that Baidu might not be as strong in AI as it once was.
(Reuters contributed to this report.)