The Beijing-based search engine provider, sometimes called China's Google, has for years heralded the potential of AI in the country.

Baidu has pushed aggressively into AI by recruiting prominent researchers and with the release of its "Ernie" tool -- one of the country's first AI chatbots.

But with cash flows still largely generated by marketing on its search platform, the firm has suffered in recent years from a pronounced slump in Chinese consumer spending.

Revenue during the first quarter of the year came to 32.1 billion yuan ($4.7 billion), a filing to the Hong Kong Stock Exchange showed, a one-percent year-on-year drop.

The figure represented the fourth straight quarter with declining revenue.

Operating income was 3.2 billion yuan during the period, the statement showed, down from 4.5 billion yuan a year earlier.

"Our AI Applications continued to gain traction across enterprises and individuals alike, further validating the commercial potential of our AI innovations," co-founder and CEO Robin Li said in the statement.

"We see AI driving even greater value for Baidu in the quarters ahead," he said.

On a less optimistic note for the firm's home market, Chinese authorities announced earlier on Monday that retail sales grew at their slowest pace last month in more than three years.

In January, Baidu said its chipmaking arm Kunlunxin had filed a listing application to the Hong Kong Stock Exchange.

Baidu said at the time the details of the spin-off remain to be finalised, but Kunlunxin would continue as a Baidu subsidiary.

Before Baidu's announcement Monday, analysis from Bloomberg Intelligence had predicted "weak" results that "underscore the magnitude of its growth issues".

The firm is grappling with a "lack of top- and bottom-line traction", the analysis said, adding that "its AI prospects remain overhyped".