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How Baidu Is Diversifying beyond Its Core Search Business

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Baidu to test autonomous buses in China next year

The race for driverless technology is beginning to heat up, with Silicon Valley companies like Alphabet (GOOG) and auto giants like General Motors (GM) already investing a lot in the technology.

Chinese tech giant Baidu (BIDU) has gotten serious about autonomous vehicles too. CEO (chief executive officer) Robin Li told the Wall Street Journal that the company plans to release self-driving buses with the help of a Chinese bus maker in China (MCHI) next year.

Baidu unveiled Apollo, an autonomous vehicle with open-source software, earlier this year and is also teaming up with Chinese automaker BAIC to produce autonomous vehicles with the help of Apollo.

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Baidu is investing big in AI

The autonomous vehicles industry represents an important strategy for Baidu. The company is now beginning to focus on AI (artificial intelligence) because its core search engine segment faced strict controls from the Chinese authorities over online medical ads.

Baidu has been spending a lot of money lately on R&D (research and development) as well. In the 12-month period ending June 30, 2017, Baidu spent a whopping $1.7 billion on R&D. Robin Li told the Wall Street Journal that most of the spending on research and development is AI-related.

Notably, Baidu stock has surged 60% YTD (year-to-date) and over 50% over the past four months.

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