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HONG KONG (Reuters) - The Hong Kong shares of Baidu plunged on Monday, wiping $2.4 billion off its market value, after the founder of the Chinese search engine giant was not spotted at a rare meeting between President Xi Jinping and corporate leaders.
Xi hosted a symposium in Beijing with the country's top tycoons, including Alibaba founder Jack Ma and Huawei's Ren Zhengfei, although two sources told Reuters there was no sign of Baidu's founder, Robin Li, attending.
Baidu did not respond to a request for comment.
Investors and market players pay close attention to the presence of senior executives at such key meetings, where the absence of a corporate leader can trigger speculation over a company's standing.
Shares of Baidu slid as much as 8.8% before paring losses to close down 7%. Baidu, with its market value now at HK$252.05 billion ($32.4 billion), was the biggest loser on both the Hang Seng Index and Hang Seng Tech Index.
Brokers said Baidu's shares had been weak since the morning after it said it would fully connect its search engine to Chinese AI start-up DeepSeek and its proprietary Ernie large language model.
"That implies the company is losing its edge after all these years of taking a leading role through its development of Ernie, suggesting the firm may need to catch up with newcomers like DeepSeek," a sales director at a regional brokerage said, declining to be identified due to the sensitivity of the issue.
The absence of Baidu executives from the symposium might also lead to speculation the company is losing its important position in the overall market, the sales director added.
The meeting with Xi signalled the government's support for China's technology sector after years of regulatory controls as Beijing seeks to boost economic growth and navigate increasingly uncertain relations with the United States.
For its part, Baidu has ramped up its push into AI as it seeks to reduce its reliance on advertising revenue from its core search engine business.
The company was among the first to launch a ChatGPT-style chatbot in early 2023, following the launch of OpenAI's ChatGPT in late 2022. Baidu has stated that its current version, Ernie 4.0, matches the capabilities of OpenAI's GPT-4.
($1 = 7.7808 Hong Kong dollars)
(Reporting By Anne Marie Roantree and Donny Kwok in Hong Kong and Liam Mo in Beijing)