Smart money isn’t just loading, it’s structuring. Baidu’s yuan-denominated senior unsecured issuance in offshore markets is a deliberate liability-matching strategy: funding RMB-based AI spend (chips, data centers, Apollo Go) with RMB debt, while keeping USD lines clean in a sanctions-risk world.
Senior unsecured notes telegraph confidence in cash-flow durability, and pricing in the Dim Sum/Reg-S market taps deep liquidity at tighter spreads than USD comps. This is classic WACC arbitrage—cheaper debt versus equity dilution.
For equity, expect near-term FCF compression as AI capex spikes, but the inflection arrives once AI Cloud gross margins expand and inference revenue scales. When capex intensity rolls off and monetization kicks in, Baidu converts AI throughput into cash flow leverage.
Punchline: Baidu isn’t scrambling for funds—they’re weaponizing the balance sheet to stay ahead in the AI arms race.
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