Baidu in China, which is often compared to Alphabet’s Google, shows no signs of slowing its betting pace on video content as its main ad unit is feeling pressure from rivals. The company’s latest financial results show that its iQiyi video streaming business recorded a net loss of 9.1 billion yuan or $ 1.3 billion in 2018, down from just 3.74 billion yuan in 2017.

Not too long ago, iQiyi announced it was raising $ 500 million in convertible notes to fuel its spending frenzy. The video site, which filed for a $ 1.5 billion IPO last February, aspires to be “Disney of China” with a Netflix-style production house and a plan to market a library of. intellectual property. Baidu also felt the heat as 2018 content costs jumped 75 percent to $ 3.42 billion, mainly due to iQiyi spending.

Cash burn seems to be paying off. IQiyi added 36.6 million subscribers last year, bringing the total number of users to 87.4 million. And 98.5% of them paid, a promising ratio, given that Chinese users have long been used to getting free content in a country where online piracy is rampant. By comparison, iQiyi the most serious competitor, Tencent Video, had 82 million users in the third quarter.

2018 also proved to be the first time that Baidu broke the 100 billion yuan mark in profit, with the company pocketing 102.3 billion yuan ($ 14.88 billion) in total revenue, an increase of 28% compared to 2017.

In the fourth quarter alone, Baidu’s total revenue grew 22 percent to $ 3.96 billion at a slower pace compared to the previous quarter. Online advertising from search results, news feeds and video content still made up the majority of the company’s revenue despite the considerable resources the giant has invested in autonomous driving and other focused efforts. AI.

Meanwhile, Baidu’s lucrative advertising business faces increased competition from ByteDance, the growing new media company with a suite of news and video apps proving popular with marketers. The Beijing-based company that also pissed off Tencent was expected to make $ 7.4 billion in revenue last year, Bloomberg reported, citing sources.

To fend off attackers, Baidu expanded its advertising inventory beyond the web to include elevators. In another move, Baidu paid $ 133 million in cash prizes to lure users to its namesake search app on Chinese New Year’s Eve. But its research department has over the years been a repeated target of criticism on issues ranging from bogus medical advertisements to, more recently, the poor quality of its research results. Baidu has nevertheless retained its dominant position in a market where Google is absent and where small players like Bing and Sogou remain the outsiders.

On the AI ​​front, Baidu made a total of 13 investments in 2018, making it the most prolific corporate venture capitalist focused on the field, according to a report by CB Insights. Microsoft’s M12 company and Google Ventures followed closely behind.

Although Baidu’s AI business is far from reaching mass commercialization, the segment has marked notable milestones. More than 200 million devices now use DuerOS, the company’s answer to the Alexa voice assistant. Baidu’s Apollo autonomous driving open platform has racked up 135 original equipment manufacturers (OEMs), including Volvo, which is working with its Chinese ally to provide level four autonomous passenger vehicles that can operate on pre-existing roads. -mapped with a minimum of human intervention.