Baidu bets it’s got up­per hand in self-driv­ing race

China Daily (USA) - - BUSINESS - By BLOOMBERG

Baidu Inc ex­pects to have the edge in au­ton­o­mous driv­ing af­ter years of run­ning China’s big­gest search en­gine, arm­ing it with ex­per­tise in ma­chine learn­ing and map­ping.

The in­ter­net gi­ant is stick­ing to a plan to have self­driv­ing cars ply China’s roads by 2018, then mass pro­duc­tion by 2020. The com­pany will fo­cus on its home mar­ket de­spite road con­di­tions there be­ing much more com­plex than in de­vel­oped coun­tries, Chief Fi­nan­cial Of­fi­cer Jen­nifer Li told the BloombergMar­kets Most In­flu­en­tial Sum­mit in Hong Kong.

Baidu is bank­ing on ar­ti­fi­cial in­tel­li­gence and au­to­mo­biles to pro­vide much­needed en­gines for growth as its search busi­ness de­cel­er­ates. This year, it’s ex­pected to post its slow­est pace of rev­enue growth since go­ing pub­lic, as Ten­cent Hold­ings Ltd and Alibaba Group Hold­ing Ltd draw ad­ver­tis­ers away. Baidu how­ever hasn’t out­lined a busi­ness plan for AI.

“AI, it’s a tech­nol­ogy. And tech­nol­ogy it­self, un­til you put it into real ap­pli­ca­tions, into real busi­nesses where it can re­ally transform in­dus­tries, it’s not re­ally of real busi­ness value,” Li said dur­ing an on­stage in­ter­view. But she pre­dicted “many new busi­ness op­por­tu­ni­ties are go­ing to come out of these core com­pe­ten­cies.”

Like Google Inc, Baidu be­lieves it has ad­van­tages in AI that can be used to de­velop

the year when Baidu Inc plans to have self-driv­ing cars ply China’s roads

driver­less tech­nol­ogy, such as in­ter­net ser­vices that adapt to each user and com­put­ers that think and re­spond like hu­mans. The Chi­nese com­pany has won ap­proval to test its self-driv­ing tech­nol­ogy in Cal­i­for­nia, be­com­ing the 15th com­pany to get per­mis­sion. And it’s also part­nered with chip­maker Nvidia Corp to de­velop the nec­es­sary tech­nol­ogy.

Delv­ing into new ar­eas will be key as its ad­ver­tis­ing ma­chine peters out. Re­search firm eMar­keter pre­dicted Baidu would fall be­hind Alibaba in terms of ad rev­enue this year, thanks in part to a series of wellpub­li­cized scan­dals and in­creased govern­ment reg­u­la­tions.

In July, the com­pany warned in­vestors that re­stric­tions on in­ter­net ad­ver­tis­ing would hurt rev­enue growth for the next two to three quar­ters and it fore­cast lower-than-ex­pected sales of 18.04 bil­lion ($2.7 bil­lion) to 18.58 bil­lion yuan in the third quar­ter.

That came as the govern­ment im­ple­mented rules to limit the num­ber of ads that can be dis­played on each page. Baidu is also ex­pect­ing slower cus­tomer growth as it rechecks the cre­den­tials of ad­ver­tis­ers to en­sure their busi­nesses are le­git­i­mate.

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