Baidu logo in the outside of office building in Shenzhen, China.

Baidu has officially called off its £2.8bn ($3.56bn) acquisition of JOYY‘ live-streaming business in China, as revealed in a filing with the Hong Kong Stock Exchange on Monday.

Baidu’s affiliate, Moon SPV, decided to terminate the share purchase agreement with JOYY, citing unfulfilled conditions for closing the deal by the end of 2023.

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The company outlined in a Monday exchange filing that the conditions primarily revolved around securing essential regulatory approvals from governmental authorities.

One notable obstacle highlighted in the termination was the reluctance of China’s antitrust regulator to approve the deal, as reported by Reuters in 2021.

The regulatory body expressed concerns about increasing control over companies amassing substantial consumer data and the necessity to dismantle monopolistic practices.

The acquisition proposal for JOYY’s Chinese live-streaming platform, YY Live, was initially put forth by Baidu in 2020.

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In response to the proposed acquisition, MuddyWatersResearch published a report claiming YY live was “90% fraudulent”, and relies heavily on external and internal bots (fake accounts to simulate views) to produce counterfeit transactions. The report significantly decreased the price of JOYY’s shares.

The termination of the deal poses challenges for search engine giant Baidu, as it seeks to broaden its revenue streams.

Baidu has been investing heavily in artificial intelligence (AI) in 2023, with the release of the latest version of its Ernie 4.0 chatbot in October, which the company claimed was outperforming OpenAI’s ChatGPT.