Why Baidu Is Betting Its Search Empire on AI Agents

China's search giant Baidu just added an AI agent called OpenClaw to its search bar, serving 700 million active users. This isn't just another feature update—it's a desperate bid to save a sinking ship as ByteDance and other rivals devour its advertising revenue.

The Search King's Decline

Baidu's full-year profit dropped in 2025, primarily due to lackluster online advertising revenue. The company that once dominated Chinese internet searches now finds itself struggling against a fundamental shift: users, especially younger ones, increasingly turn to short-form videos instead of search engines for information.

When someone wants restaurant recommendations, they're more likely to scroll through TikTok videos than type queries into Baidu. This behavioral change has hit Baidu's core advertising business hard, as marketers follow eyeballs to platforms like ByteDance's Douyin.

AI Agent as the Comeback Strategy

OpenClaw represents Baidu's attempt to transform search from a "show me results" tool into a "help me decide" assistant. Instead of displaying ten blue links, the AI agent understands context and provides personalized responses. Ask about Beijing weather, and it might suggest bringing an umbrella based on your calendar and preferences.

This mirrors the broader industry trend toward conversational AI, following the success of ChatGPT and Google's Bard. But Baidu's approach is different—it's integrating the agent directly into its existing search infrastructure rather than launching a separate chatbot.

The Risky Bet

The strategy carries significant risks. If users become too dependent on AI-generated answers, they might stop clicking through to websites—the very action that generates Baidu's advertising revenue. It's like a restaurant owner replacing the menu with a waiter who describes everything but never lets customers see the dishes.

Moreover, AI agents require massive computational resources. Every query processed through OpenClaw costs more than traditional search results, potentially squeezing profit margins even further.

Global Implications

Baidu's move signals a broader transformation in how we'll interact with information online. Google is experimenting with similar features through its Search Generative Experience, while Microsoft has integrated AI into Bing. The race isn't just about better search results anymore—it's about becoming users' primary digital assistant.

For investors, this represents both opportunity and uncertainty. AI-enhanced search could create new revenue streams through premium services or more targeted advertising. But it could also cannibalize existing business models if users bypass traditional web browsing entirely.