Search and artificial intelligence (AI) giant Baidu has reported a quarterly net loss for the first time since listing in 2005, as the company grapples with China’s slowing economy and increased competition while spending on promotional activities skyrocketed.

Baidu lost nearly RMB 330 million (around $48 million) in the first three months of 2019. This compares to the company’s net income of RMB 6.7 billion during the first quarter of 2018. Baidu shares fell around 9% in aftermarket trading following the release of its results.

Baidu attributed its losses to increased spending on content, most notably iQiyi, as well as promotional activities in which Baidu gave away hongbao, or red packets, as part of an alliance with national broadcaster China Central Television over Chinese New Year.

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Chris Udemans

Christopher Udemans is a Shanghai-based data and graphics reporter. He covers Chinese artificial intelligence, mobility, and cybersecurity. You can contact him at chrisudemans [at] technode [dot] com.