Despite global economic uncertainties, US chip export restrictions and ongoing trade tensions, several Chinese tech giants posted results that exceeded expectations and highlighted the growing importance of artificial intelligence (AI) and digital transformation across industries, increasingly threatening the dominance of their US competitors, writes eToro analyst for Romania, Bogdan Maioreanu.
Meanwhile, Nvidia CEO Jensen Huang characterized the U.S. export controls on artificial intelligence chips to China as a ”failure”, according to Reuters. They have cost American companies billions of dollars in lost sales, he said on Wednesday. Huang emphasized that these restrictions have led to a dramatic decline in Nvidia’s market share in China, from 95% at the start of former President Joe Biden’s administration to just 50% today. As export controls have limited access to advanced U.S. AI chips, Chinese firms such as Baidu, Alibaba, and Tencent—all of whom are investing heavily in artificial intelligence and cloud computing—have been compelled to accelerate their own semiconductor development and sourcing. This has resulted in increased reliance on domestic chipmakers like Huawei, which has seen its market share and technological capabilities grow as a result. And this race for better AI capabilities continues.
Baidu, China’s leading search engine and AI innovator, reported Wednesday financial results that handily beat Wall Street forecasts. The company reported adjusted net income of 7.01 billion yuan ($970 million), significantly ahead of analyst expectations of $682 million. Revenue grew 3% year-over-year to 31.51 billion yuan ($4.36 billion), also surpassing projections. While traditional online marketing revenue declined by 6% to $2.21 billion, Baidu’s other core business segments—especially its AI cloud division—saw revenue jump 40% to $1.3 billion. This underlines Baidu’s successful pivot toward artificial intelligence and cloud services, even as it faces stiff competition from domestic rivals like Alibaba and Tencent. Ernie, once positioned as China’s ChatGPT, is already being outshone by models like DeepSeek and Alibaba’s Qwen. Compared to Alibaba, which is leveraging open-source AI and a broader e-commerce base, Baidu’s narrower exposure makes it more vulnerable to macro and competitive shocks.
But it’s too early to count Baidu out. Its focus on infrastructure, AI cloud, self-developed chips, and autonomous driving could give it more staying power than the hype-chasers. The robotaxi push into Europe is ambitious, and if executed well, it could reshape Baidu’s future. For the year, Baidu is a laggard with a rise in stock price of only 1.4% if compared with the 46% of Alibaba and 25% of Tencent.
Tencent, the world’s largest gaming company and a leader in social media and fintech, reported last week revenue of 180,022 million yuan ($25 billion) for Q1 2025, a net increase of 13% year on year. AI is helping Tencent lift its click-through rates — a measure of success for online ads — to nearly 3% from 0.1% click-through rate for banner ads historically, and around 1% for feed ads, company management said on the earnings call. The company’s diverse portfolio—spanning gaming, social media, digital payments, and cloud services—continues to make it a bellwether for China’s tech sector. Tencent’s ongoing investments in AI and gaming are seen as pivotal to its future growth.
Alibaba, China’s e-commerce powerhouse, reported disappointing sales results for its March quarter, with revenue rising 7% year-over-year to 236.5 billion yuan (almost $33 billion) but missed the estimates by $740 million. Despite this, operating income surged 93% year-over-year, driven by strong cloud revenue and sustained growth in AI-related products. The Cloud Intelligence Group’s revenue grew 18%, with AI product revenue achieving triple-digit growth for the seventh consecutive quarter. Alibaba’s share price has advanced this year on the apparent return of former top executive Jack Ma and the breakthrough of low-cost Chinese AI models in the slipstream of DeepSeek.
Despite chip export limitations, Chinese technological giants are managing to advance in AI development and integration, but also in chip design. According to the latest eToro Retail Investor Beat survey, 27% of Romanian retail investors believe the Chinese market will deliver the strongest returns over the long term, up from 14% just a year ago. And this is threatening the dominant position of Nvidia in investors’ preferences. Nonetheless, investors are still seeing potential in the American chip giant as 12% of Romanian retail investors and 8% of global ones declared that it is likely to increase their holdings in the company’s stock this year.
