Baidu shifts some R&D from US unit to China

Baidu Inc is shifting part of its research and development (R&D) work for the autonomous-driving project Apollo from the US to China, which analysts said was a “rational” way for the company to become better-integrated in the nation’s fast-growing intelligent transportation sector supported by 5G.

Baidu confirmed the shift to the Global Times on Tuesday. It said that the move will help Apollo fit into the expansion of domestic sectors such as intelligent transportation as well as accelerate its application and commercialization.

The transfer will allow Apollo’s products and commercial growth to further connect with domestic partners and benefit from China’s industrialization and scale advantages, the company said.

The remaining work in the US unit will focus more on the R&D of cutting-edge and core technology and promote the construction of a global ecosystem for Apollo, according to Baidu.

Feng Shiming, a veteran car industry analyst based in Shanghai, said Baidu’s move was probably driven by technology and market factors.

Given the US government pressure on China’s high-technology sector, US technology companies have increasingly taken precautions against Chinese companies, and the flow of talent and technological learning in the US may not have met Baidu’s expectations, Feng told the Global Times on Tuesday.

Feng called it a “rational” choice [for Baidu] to abandon a mature market and seek gains in a more promising emerging region, as China’s 5G technology and chip sector are developing quickly and the country has become one of the standard setters of autonomous-driving technology.

Also, road conditions and user habits in China are different from those in the US, and tests in the domestic market are more targeted, Feng said, noting that as Baidu’s customers and partners are mostly in China, the transfer will lower operating costs.

Baidu announced it set up an R&D unit for autonomous vehicles in Silicon Valley in April 2016. One year later, it unveiled the Apollo project.

The government of Cangzhou, North China’s Hebei Province, issued 30 test licenses for smart connected cars to Baidu on Saturday, media reports said.

On September 22, Baidu and other two Chinese companies won the country’s first commercial licenses from the traffic authorities in Wuhan, Central China’s Hubei Province. These licenses will enable intelligent-connected cars to carry passengers publicly.