iQIYI's Ownership Landscape: Public Companies and Institutions Shape the Streaming Giant's Future

iQIYI, Inc. (NASDAQ:IQ), China’s leading online entertainment platform, is navigating a complex ownership structure that blends strategic corporate control with institutional influence. With 45% of its shares held by public companies, primarily its parent Baidu, Inc., and 30% owned by institutional investors, the company’s governance and growth trajectory hinge on these key stakeholders. Let’s dissect how this ownership mix impacts iQIYI’s prospects—and what investors should watch.

The Ownership Breakdown: Baidu’s Dominance and Institutional Influence

• Public Companies (45%): Baidu, Inc. holds the lion’s share, leveraging its 45% stake to exert strategic control. This relationship dates back to iQIYI’s founding in 2010, with Baidu providing technical and financial support. The stake gives Baidu veto power over major decisions, from content investments to AI-driven innovations.
• Institutions (30%): Major investors include Goldman Sachs, Krane Funds Advisors, and Robeco, which have actively traded shares in recent quarters. For example, Robeco increased its holdings by +1,117% over two years, signaling confidence in iQIYI’s long-term potential. Meanwhile, FIL Ltd reduced its stake by -79% in early 2025, highlighting the volatility of institutional sentiment.
• Retail Investors (24%): Individual shareholders round out the ownership base, though their influence is limited compared to the corporate and institutional blocs.

Baidu’s Strategic Role: A Double-Edged Sword

Baidu’s majority stake is both an asset and a risk. On one hand, its backing provides stability:
- Technological Synergy: Baidu’s AI capabilities power iQIYI’s recommendation algorithms and content production tools, enhancing user engagement.
- Financial Support: Baidu has historically injected capital during lean periods, such as a $300 million investment in 2020 to offset pandemic-driven losses.

However, reliance on Baidu exposes iQIYI to risks:
- Competing Priorities: Baidu’s focus on AI and autonomous driving (via Apollo Go) could divert resources from iQIYI’s streaming business.
- Regulatory Headwinds: China’s crackdown on tech giants—exemplified by antitrust fines and data privacy laws—could pressure Baidu’s broader ecosystem, indirectly impacting iQIYI.

Institutional Activity: Volatility Amid Optimism

Institutional investors have been both buyers and sellers over the past two years:
- Net Buying Power: Despite FIL Ltd’s retreat, institutions poured $259.75 million into iQIYI shares since 2023, driven by optimism around its AI-driven content strategy and growing international audience.
- Sector-Wide Challenges: The broader streaming sector faces headwinds, including rising content costs and competition from Netflix and Tencent Video. This has pressured iQIYI’s market cap, which dipped to $1.9 billion in early 2025 from $3.3 billion in late 2023.

Key Risks: VIE Structure and Regulatory Uncertainty

iQIYI’s corporate structure adds another layer of risk. As a variable interest entity (VIE), it operates through contractual arrangements with its Chinese subsidiaries, avoiding direct foreign ownership restrictions. This setup, however, exposes it to:
- Regulatory Scrutiny: China’s tightening control over tech firms could invalidate VIE agreements, stripping iQIYI of operational control.
- Delisting Risks: The Holding Foreign Companies Accountable Act (HFCAA) requires audit compliance. A failure to meet U.S. PCAOB standards could lead to delisting—a severe blow to liquidity.

Conclusion: A High-Reward, High-Risk Play

iQIYI’s ownership structure presents a nuanced picture. On the positive side:
- Baidu’s Resources: Its parent’s financial and technological clout position iQIYI to innovate in AI and content delivery.
- Institutional Support: The $259 million net inflow since 2023 reflects confidence in its long-term potential.

The risks, however, are formidable:
- Regulatory Uncertainty: The VIE model remains vulnerable to policy shifts in China.
- Market Competition: Netflix and Tencent Video are eroding iQIYI’s dominance, with its revenue dropping 14% year-over-year in Q1 2025.

For investors, iQIYI is a high-risk, high-reward bet. While its ownership structure offers strategic advantages, success hinges on navigating regulatory storms and outpacing rivals. Those willing to bet on its AI-driven turnaround may find value, but the path ahead is fraught with obstacles.

In the end, iQIYI’s fate rests on balancing Baidu’s influence, institutional support, and the ever-shifting regulatory landscape—a delicate dance that could make or break this streaming giant.