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Baidu sees AI giving it head start in race to develop self-driving car market in China

Unfazed by the early initiatives of Google and Tesla, Chinese online search giant Baidu is looking to take the lead in the commercial application of artificial intelligence for autonomous driving on the mainland, the world’s largest car market.

“China’s road conditions are, perhaps, much more complex than in other developed countries,” Baidu chief financial officer Jennifer Li Xinzhe said at a Bloomberg event in Hong Kong on Wednesday.

“Autonomous driving can bring tremendous value in the issues it can address [in China] like traffic jams, air pollution and road safety.”

Li reiterated Baidu’s target of initially getting self-driving cars on mainland roads by 2018 and the mass production of these vehicles in 2020.

“We think the automobile is the next major computing platform,” said Li. She added that the company has been investing in artificial intelligence over the past four or five years, with an eye on creating a new growth engine that will help transform traditional industries like transport and financial services.

“We think about it as electricity. If you look at how electricity has transformed human society, that is how AI is going to transform industries,” she said.

John Choi, an analyst at Daiwa Capital Markets, said Baidu’s AI efforts would have “immaterial revenue contribution to Baidu over the next three years, “while research and development investments might weigh on operating margins”.

The commercial prospects for AI may seem largely unclear to the investor community, but that has not stopped Baidu from making bigger bets in terms of strategic investments and alliances.

Earlier this month, Baidu launched a US$200 million venture capital unit to invest in AI projects.

Baidu Venture, which is headed by company founder and chief executive Robin Li Yanhong, will also focus on augmented and virtual reality initiatives.

This new enterprise will be independently run from Baidu’s existing investment teams, allowing it to make fast decisions without having to go through complicated internal approval processes, the company said.

“AI is our opportunity and we’re pretty fortunate the world is coming to this stage,” Li said on the sidelines of the company’s annual world conference in Beijing on September 1.

He pointed out that Baidu was about two to three years ahead of other companies in China in terms of AI development.

At the same event, Baidu and US semiconductor technology company Nvidia announced their partnership to develop autonomous driving based on Baidu’s mapping data, image

recognition technology and Nvidia’s high-performance AI computing platforms.

Nvidia chief executive Huang Jen-hsun said the partnership’s goal was “to build the self-driving car architecture from end-to-end, from top-to-bottom” for Chinese and global carmakers.

Baidu last month joined the Ford Motor Co in investing a combined US$150 million in Velodyne LiDAR, a company based in California’s Silicon Valley that produces sensors for self-driving cars.

That investment is expected to help Velodyne expand the design and production of solid-state hybrid light, detention and ranging sensor technology, known as LiDAR, that can be used in a range of applications including three-dimensional mobile mapping, 3D aerial mapping and security.

“Baidu is developing autonomous vehicles with the intention to increase passenger safety and reduce traffic congestion and pollution in China,” said Wang Jing, a senior vice-president at the Chinese online search giant and the general manager of its autonomous driving unit.

As many as 33 companies are currently involved in the development of driver assistance systems and self-driving cars, including Apple, General Motors and Microsoft.