This paper uses Bayesian robust new hidden Markov modeling (BRNHMM) for bearing fault detection and diagnosis based on its acoustic emission signal. A variational Bayesian approach is used that simultaneously approximates the distribution over the hidden states and parameters with simpler distribution hence using Bayesian inference for the estimation of the posterior HMM hyperparameters. This allows for online detection as small data sets can be used. Also, the Kullback-Leibler (KL) divergence is effectively used to access the divergence of the probability function of the BRNHMM, to find its lower bound approximation and by applying a linear transform to the maximum output probability parameter generation (MOPPG). The training set result obtained from BRNHMM is then compared to the result from artificial neural network (ANN) fault detection for same complex system of low speed and varying load conditions which are difficult from a diagnostic perspective, as found in rolling mills.