Baidu has reached a historic milestone as its artificial intelligence businesses surged to become its primary revenue driver in the first quarter, despite a 2 per cent dip in overall income, the Chinese tech giant said on Monday.

The company’s AI-related businesses, including AI cloud, AI applications and AI marketing services, saw revenue grow to 13.6 billion yuan (US$2 billion), a 49 per cent year-on-year increase.

“AI-powered business exceeded half of Baidu’s general business revenue for the first time, marking a clear signal that AI has become the core driver,” said Robin Li Yanhong, founder and CEO of Baidu, in an earnings release.

AI cloud revenue jumped 79 per cent year on year to reach 8.8 billion yuan amid the country’s growing demand for AI to drive transformation at corporations.

Li credited the segment’s growth to a surge in enterprise demand and the “differentiated full-stack AI capabilities we have built over the years”.

Analysts had expected the company’s AI cloud infrastructure to grow into a significant revenue driver this quarter as advertising revenue slowed, according to a research note by securities firm SPDB International last month.