Baidu Inc. (BIDU), often described as China's answer to Alphabet Inc.'s (GOOGL) Google, just made a significant gesture to shareholders. The company announced Wednesday it's launching a new $5 billion share repurchase program and introducing its first-ever dividend policy.
The Board has authorized the buyback program for up to $5 billion of the company's shares, effective through December 31, 2028. And for the first time in Baidu's history, the Board has approved a dividend policy for its ordinary shares. The company expects to declare the first dividend payment in 2026.
The Cash Flow Reality Check
Here's where things get interesting. Despite holding $41.64 billion in cash and equivalents as of September 30, 2025, Baidu reported a concerning $302 million free cash flow outflow. The culprit? Heavy investments in AI.
The company has also been trimming its workforce, with cuts reaching up to 40% in some departments. It's the classic tech company balancing act—pouring money into the future while managing the present.
But Baidu remains committed to its AI strategy. The company's Ernie AI assistant has surpassed 200 million monthly active users, and it's moving forward with plans for a $2 billion Hong Kong IPO for its Kunlunxin AI chip unit.
The stock has gained over 55% in the last 12 months, suggesting investors have been betting on the AI pivot paying off.
BIDU Price Action: Baidu shares were up 5.28% at $145.22 during premarket trading on Thursday.
