Baidu, China’s search and ad giant, has aggressively re-focused its business on artificial intelligence (AI) and connected vehicles as the U.S.-China trade war heats up and online advertising matures and becomes less profitable.
The company earned 80 percent of its revenues in advertising in 2017, but that could change dramatically in coming years. Baidu’s $1.5 billion, three-year investment in Apollo, its open source autonomous vehicle (AV) platform, has fueled scores of of innovations and partnerships.
At CES in early January, Baidu released Apollo 3.5, which will be featured in a new self-delivery van from Udelv that begins trials in February in Surprise, Arizona.
Apollo is already used by more than 130 carmakers and tech firms globally, including Ford, Microsoft, Nvidia, Intel, and Bosch.
“Baidu is going all out in the autonomous vehicles space with big R&D projects and a broad network-partner ecosystem supporting its Apollo self driving platform,” wrote Matt Walker and Arun Menon at MTN Consulting, an independent research firm. The firm’s latest report, Webscale Playbook: Baidu, is the fourth in a series analyzing eight webscale network operators: Baidu, Alibaba, Amazon, Apple, Facebook, Microsoft, Tencent, and Alphabet, the subject of MTN’s most previous Playbook.
The company’s Apollo research and partnerships span across operating systems, semiconductors, hardware components, and cloud alliances, MTN noted. For example, BlackBerry’s QNX vehicle OS will be bundled into Apollo, including Baidu’s CarLife smartphone integration software for connected cars which will be paired with high-def maps to operate in QNX Car, an infotainment platform.
Baidu uses Nvidia’s Drive PX 2 AI supercomputer and Nvidia Tesla GPUs to power Apollo vehicles. Bosch will provide sensors and other hardware components, while Baidu has a joint investment with Ford in Velodyne for lidar sensor components.
The company has also partnered with Microsoft Azure cloud services for support of companies using Apollo outside of China. Within China, Baidu relies on its own cloud, through its own data centers and partnerships. “The lack of this computational and processing power outside China could make it tough for Baidu to take on the likes of Alphabet’s Waymo and Uber’s self-driving initiative, but tapping Microsoft would help Baidu counter that,” MTN said.
Kunlun AI Chip
Also, Baidu has spurred an ambitious AI technology quest, announcing its Kunlun AI chip in July. MTN described Kunlun as a rival to Google’s Edge TPU and GPUs from Nvidia and Intel. Kunlun already is deployed in Baidu’s data centers to run machine-learning jobs for its own apps. Baidu collaborated with China Mobile on AI, 5G wireless, and big data in June and completed road tests for autonomous vehicles in a 5G network in March with ZTE and China Telecom.
DuerOS, the conversational AI platform from Baidu, last August reached an installed base of 100 million devices, including smart speakers, smart lamps, and cell phones.
MTN warned that “Baidu’s healthy topline growth (from advertising) could slow down…amid tightened regulations and trade war.” Specifically, the company could face some supply chain constraints for AV or potential restrictions on tech trials and R&D partnerships, Walker said in an email.
While AV is a cost center for Baidu now, “it could drive an entirely new business for Baidu,” Walker said. “It’s definitely a matter of high risk, high reward though. Uncertainty about technology adoption rates is made worse by trade wars.”