(Reuters) - Search engine giant Baidu ( BIDU ) beat quarterly revenue estimates on Tuesday, indicating some recovery in the Chinese advertising market.

Baidu ( BIDU ) has offset losses through its AI Cloud segment's growth, and in a strategic shift amid intensifying competition, announced last week that its next-generation AI model Ernie will become open-source from June 30.

Baidu's ( BIDU ) online marketing business, which contributes the majority of its revenue, stood at 19.34 billion yuan ($2.66 billion). Analysts had estimated 19 billion yuan.

But its revenue that does not depend on online marketing rose 18% to 9.8 billion yuan, largely driven by its AI Cloud business.

The company reported a revenue of 34.12 billion yuan for the fourth quarter, beating analysts' estimate of 33.32 billion yuan, according to data compiled by LSEG.

Baidu's ( BIDU ) U.S.-listed shares were down about 2% in premarket trading.

($1 = 7.2770 Chinese yuan renminbi)