Baidu Inc. reported third-quarter financial results that beat analyst estimates for revenue and earnings, but also revealed the steepest quarterly revenue drop on record. The company announced total revenues of $4.38 billion, a 7% decrease year-over-year, and a significant net loss of $1.58 billion, compared to a profit in the prior year's quarter. The report highlighted a major challenge in Baidu's core business, with online marketing revenue falling 18% as it faces stiff competition. However, the company's focus on artificial intelligence showed strong positive results. Revenue from its AI Cloud business grew 21% year-over-year, demonstrating momentum in its newer ventures and providing a silver lining to the otherwise mixed financial picture. Initial pre-market trading reaction was positive, with the stock rallying as investors focused on the earnings beat despite the underlying challenges in the legacy advertising segment. The results underscore Baidu's ongoing transition from a search-centric company to one heavily reliant on its AI and cloud-based initiatives for future growth.