Baidu Bets on Buybacks and First-Ever Dividend to Woo Investors Amid AI Slowdown
HONG KONG/BEIJING – In a significant shift toward rewarding its long-term shareholders, Baidu Inc. unveiled plans on Thursday for its first-ever dividend payment alongside a new $5 billion share buyback program stretching to 2028. The move signals a strategic pivot for one of China's earliest AI champions, as it seeks to bolster confidence after its stock price retreated from the dizzying heights of the 2021 tech rally.
The Beijing-based company stated in a regulatory filing that it expects to declare the initial dividend this year, which could take the form of a regular or special distribution. This capital return initiative places Baidu firmly alongside Chinese tech giants Tencent Holdings and Alibaba Group, both of which have aggressively expanded shareholder returns in recent quarters amid a maturing market landscape.
Baidu's Hong Kong-listed shares initially rallied as much as 2.4% on the news, bucking a broader sell-off in the Hang Seng Tech Index. However, the gains were pared by the close, reflecting lingering investor caution. The stock remains down approximately 14% from a 2026 peak and is a shadow of its lifetime high reached in March 2021.
The announcement arrives at a critical juncture. While Baidu was among the first in China to launch a public ChatGPT-like service, Ernie Bot, it has since ceded perceived leadership in the generative AI race to better-resourced rivals and agile newcomers. The fading euphoria around pure AI narratives has pressured management to demonstrate tangible financial discipline and a commitment to shareholder value.
"This is a necessary, if somewhat belated, acknowledgment that capital allocation matters," said Michael Chen, a portfolio manager at Argosy Capital in Hong Kong. "The buyback size is meaningful, and the dividend signals maturity. But the real test is whether this is a one-off or the start of a sustained capital return policy, especially if core advertising growth remains challenged."
The sentiment was more pointed from other quarters. Lisa Wang, an independent tech analyst based in Shanghai, offered a sharper critique: "It feels like a consolation prize for investors who watched the AI dream fizzle. Throwing a few billion at buybacks doesn't solve the fundamental issue—Baidu missed its moment to dominate the AI platform war. This is financial engineering to mask strategic stumbles."
The scale of Baidu's program is notably more modest than some of its peers. In 2024, Alibaba approved a massive $25 billion repurchase plan, while Tencent outlined buybacks of at least HK$80 billion ($10.2 billion) last year alongside a substantial dividend hike. Beyond the internet titans, other Hong Kong-listed Chinese firms like Xiaomi and Geely Auto have also been active in the buyback market to support their valuations.
Despite the renewed focus on capital returns, competitive intensity in Baidu's core markets remains feverish. The company is locked in a costly battle with Tencent and Alibaba to acquire users for its AI services, with all three planning to distribute hundreds of millions in credits to attract users during the upcoming Lunar New Year period—a clear sign that the war for AI supremacy is far from over.
David Zhang, a retail investor who has held Baidu shares since 2019, viewed the news pragmatically: "As a long-term holder, I welcome any return of capital. The dividend is a bonus I didn't expect. It shows the company is generating real cash flow, even if the growth story has changed. I'd rather see disciplined returns than reckless spending on an unprofitable AI arms race."
Baidu is scheduled to report its quarterly earnings later this month, where analysts will scrutinize the health of its search and cloud businesses for signs of stability that can fund these new shareholder promises.