Baidu, despite holding a near monopoly on the Chinese Internet search business, is facing hurdles as the company's growth shrinks and regulatory agencies are piling pressure on it. Moreover, Baidu is also spending a lot of cash in several acquisitions and deals as part of the company's effort to diversify its profits.

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Baidu, whose search profits account for 90 percent of it's revenue, has reported declining profits over the past few years. Although the company's second-quarter sales managed to increase by 10 percent, Baidu's profits dropped by 36 percent on a year-to-year basis. This is the company's biggest quarterly decline in its 11 years of operation.

With China's strict online protocols, Baidu is facing a lot of pressure from regulatory agencies. China recently announced a new and stricter set of guidelines for online advertising. The country's regulatory agencies now require online advertisers to make sure that their ads are clearly designated to help users distinguish the truth from sponsored content.

China's strict online ads policy was drafted due to a scandal following the death of a college student who took medical advice from some of Baidu's online advertisers.

According to Epoch Times, with the deteriorating performance of its core business, Baidu is looking to diversify its profits by pouring millions in investments into new technologies like artificial intelligence and self-driving cars. Last week, graphics card manufacturer Nvidia announced that it is partnering with Baidu to develop a platform for self-driving cars.

As part of the company's effort to developing its artificial intelligence platform, Baidu has open sourced one of its major machine learning platforms called PaddlePaddle. Baidu hopes that by open sourcing its platform, it can attract experts in artificial intelligence and help it build its technology.

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