Baidu's AI cushion shrank 8%; its defense is a Siri slot Apple has not shipped

Lead-plaintiff applications close on November 13

Baidu·+0.81% — Baidu, up 0.81 percent as of its last quote told investors its AI-powered business would absorb the decline in its search-advertising revenue. In the June 2026 quarter the AI business itself shrank, and a securities class action pending in the Southern District of New York↗ says that offset was overstated ¹². The suit covers anyone who bought the shares between November 18, 2025, and August 17, 2026, and names co-founder and chief executive Robin Li and chief financial officer Haijian He as individual defendants ³.

The stock closed at $86.99 on October 6, 2026, down 42% for the year ⁴ and far below the class-period high of $162.52 set on January 22, 2026 ³. Investors who want to lead the class have until November 13 to apply ³.

The absorber shrank in the June quarter

The complaint is arithmetic. Online marketing, still 53.1% of revenue in the third quarter of 2025, fell 17.6% year on year, and management cast the AI-powered business, up 48% to RMB 40 billion in 2025, as the absorber of that decline ¹. The complaint adds that the segment figures came from internal management accounts that were never audited↗ ².

In the June 2026 quarter the absorber shrank. The AI-powered line fell 8% quarter on quarter to RMB 12.5 billion, its annual growth slowed from 49% to 25%, and its largest piece, AI cloud infrastructure, dropped 17% to RMB 7.3 billion ¹². The shares fell 12.73% to $90.87 on August 18 ¹.

Baidu's own filings↗ show the problem the offset was meant to solve: twelve quarters of revenue stuck between $4.4 billion and $4.9 billion, and a $1.58 billion net loss in the September 2025 quarter ⁵.

The rebuttal came from counterparties, not Baidu

Apple▼−0.34% — Apple, down 0.34 percent today switches on Apple Intelligence in mainland China in December, two years behind the rest of the world, through the iOS 27.3 update↗ ⁶⁷. Alibaba's▼−0.04% — Alibaba, down 0.04 percent today Qwen and Tongyi Wanxiang models supply the features, while Baidu handles search and Siri-related functions ⁶. The December release leaves out the redesigned Siri and Image Playground, and the Siri redesign is the piece of Baidu's assignment that users would notice most ⁶⁷.

Hong Kong's Transport Department, which licensed Baidu's robotaxis in 2024, opens the city's first large public trial on October 21↗: more than 1,000 riders on a 5.1 km loop in Tung Chung, a backup operator in every car, on a fleet that has covered 280,000 km in the city ⁸. Neither announcement carries a fee.

The capex build continues while the calendar closes

Whether or not the case survives, the build continues: Alibaba, Tencent and Baidu spent $20 billion on capital expenditure in the June quarter↗, all three posting negative free cash flow for the first time, toward roughly $100 billion across China's four biggest spenders this year ⁹.

Tung Chung closes on November 3 ⁸, lead-plaintiff motions close on November 13 ¹, and Apple ships in December ⁶. The tell is the AI-powered line in Baidu's next quarterly report, the first full quarter after the contraction. The bull case, a modeled fair value of $146.50 against the $86.99 close↗, is a bet that a disclosed fee arrives before the verdict does ⁴.