China’s AI market leader shares plans to conquer the sector
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China’s AI market leader shares plans to conquer the sector

Baidu is often described as the Chinese answer to Google. It is an apt description. Like Google, Baidu dominates its domestic landscape’s search capability. Also like Google, it is an ambitious market leader in the artificial intelligence (AI) sector. There is little doubt that Google will win the AI race in the west. And there is little doubt that Baidu will win the AI race in the east. The only question that remains is who will win globally.

Legendary engineer and Microsoft veteran, Qi Lu, who is also Baidu’s chief operating officer, spoke to Wired earlier this month to make the case that Baidu’s got what it takes.

Baidu’s share price is up 35% so far in 2017

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SOURCE: Yahoo Finance

Describing Baidu’s AI strategy, Lu says:

“We believe the best way to commercialize AI technology is to build ecosystems. Essentially, to enable our partners to better accelerate their pace of innovation, using healthy, stable economic models to build strong, long-term win-wins for our developers and partners. The baseline is Baidu Brain [the term Baidu uses for all of its AI assets]. It’s broader and more extensive than what Microsoft and Google offer today in the United States, because it’s a platform. We have 60 different types of AI services in our suite we call Baidu Brain.”

Lu thinks that Chinese companies in the space have a “structural advantage”: there are 731 million people online in China – that’s twice the entire population of the U.S. And looking at the global population, Lu says that the way the Chinese live is more commonplace than the way Americans do. Discussing how this affects connected home technology, he says:

“Alexa, Echo, and Cortana are optimized for American homes. In my view, this only works in North America and maybe a portion of Europe. Essentially, the assumption is that you have spacious homes; you have several rooms. In China, that’s not the case at all. For our target, even for the young generation with high incomes, typically they have 60 square meters [645 square feet], sometimes 90 square meters [970 square feet]. We have better opportunities to globalize DuerOS, because guess what? A home in Japan, a home in India, or a home in Brazil, is a lot closer to a home in China than a home in North America.”

Lu also spoke about Baidu’s self-driving car ambitions. He says that self-driving cars are not only a great product from a retail perspective, but an important part of developing more complex AI in the future:

“If you want to truly build digital intelligence to be able to acquire knowledge, make decisions, and adapt to the environment, you need to build autonomous systems. In autonomous systems, the car is the first major commercial application that is going to land.”

What does the near future have in store for Baidu and its expansion plans? According to Lu:

“Baidu will do more and more AI work in China, for sure. But at the same time, we’re continuing to invest in the United States, in the Bay Area and also Seattle. We just opened a Seattle campus, because we acquired a company called Kitt.ai. For the very top echelon of the talent, the United States is still better, and we want to fully leverage that.”

Disclosure

Dominion holds Baidu in its Global Trends Ecommerce Fund.


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