China’s Baidu exceeded analysts’ forecasts for first-quarter revenue on Thursday, thanks to increased demand for its AI-powered cloud solutions and a rebound in ad sales.

The business, which operates the biggest search engine in China, reported revenue for the three months ended March 31 of 31.51 billion yuan ($4.37 billion), which was higher than the average projection of 31.21 billion yuan made by analysts based on LSEG data.

The company’s U.S.-listed shares increased by almost 3% in premarket trading.

In an attempt to increase sales of its AI-related goods and services, Baidu has stepped up its efforts.

Even while the corporation still makes the most money from sales of advertisements, this calculated move is a part of an image makeover effort.

“Baidu Core’s online marketing revenue remained stable, while the end-to-end optimization of our AI technology stack continued to propel the growth of our AI Cloud revenue during the quarter,” said co-founder and CEO Robin Li in an earnings release.

Baidu Core’s revenue increased by 4% to 23.8 billion yuan, which comprises its search-based ad sales, cloud services, and autonomous driving projects.

Revenue at its streaming service iQIYI had a 5% decline, amounting to 7.9 billion yuan.

LSEG data shows that Baidu’s adjusted net income for the quarter was 7 billion yuan, above analysts’ average expectation of 557 billion yuan.

(Adapted from Reuters.com)