Chinese internet giant Baidu has announced the cancellation of its planned multi-billion-dollar acquisition of the livestreaming platform YY Live, citing difficulties in obtaining government approval as a contributing factor.

Baidu, the leading search engine company in the country, had agreed in 2020 to purchase Joyy Inc's Chinese live video business, YY Live, for $3.6 billion.

Baidu founder Robin Li had previously stated that the deal would propel Baidu into a prominent position in the live streaming sector and diversify its sources of revenue.

However, Baidu disclosed in a filing to the Hong Kong stock exchange on Monday that it would terminate the purchase agreement.

The company clarified that the completion of the proposed acquisition was contingent on meeting certain conditions, including obtaining regulatory approvals from governmental authorities.

As of December 31, 2023, these conditions had not been fulfilled.

Originally anticipated to conclude by 2021, the deal's delay is attributed to the complexities of regulatory clearance.

Livestreaming is a lucrative industry in China, yielding substantial profits for e-commerce giants and popular influencers.

Baidu has faced heightened competition from domestic rivals, such as Tencent and ByteDance, prompting the company to explore diversification into cloud computing, autonomous driving, artificial intelligence (AI), and other sectors, with varying degrees of success.

Baidu's shares experienced a decline in March following investor dissatisfaction with the company's AI software, "Ernie Bot," reminiscent of ChatGPT. In November, Baidu reported modest year-on-year revenue growth of 6.0 percent for the third quarter of 2023.