Baidu, the world's No. 3 force in online advertising after Google and Facebook, sees artificial intelligence as the next big thing. And it's using AI to power advertising, voice recognition technology and self-driving cars.
During its annual conference Thursday in Beijing, the search giant announced news on the autonomous vehicle front, saying it had won clearance from the California Department of Motor Vehicles to test its cars there. It also signed a partnership with U.S. chip-maker Nvidia to work on self-driving cars together.
Despite all the investment on futuristic projects, Baidu got nearly 93% of its revenue in the last quarter from online marketing. It has been trying to branch out, with services like takeout delivery and movie ticket booking, and with splashy deep-learning work similar to the Google Brain project.
The push to diversify revenues has become more pressing now that Baidu's ad business has hit a rough patch. China has tightened the regulations for online advertising in China, prompted by a national outcry over Baidu's healthcare ads. (A student with cancer died after blaming a Baidu search ad for leading him to a costly and unproven treatment. That set off a backlash among people who felt Baidu was putting profits above people's health.)
Baidu has cut the amount of ads its shows per page. Its net income was down 34% in the second quarter, and it has predicted two or three more quarters of suppressed revenue growth. Meanwhile, as the global No. 3 digital ad player, according to eMarketer, it's competing with tech giants Alibaba and Tencent for China's online attention.
But advertising wasn't a focus of the conference, where the catchphrase was "AI is the new electricity."
"To Baidu, AI is the top priority," founder Robin Li said.
The company did talk a bit about advertising, explaining that it's building detailed profiles of users for targeting. It showed how L'Oreal has experimented with a new augmented reality offer called DuSee. People can use Baidu's image recognition tech on a bottle of L'Oreal's Ultra Doux shampoo, sparking a cascade of AR blossoms to pop up on the screen.
Image and voice recognition are a focus; Mr. Li showed how its voice recognition could be used by inexperienced staff making sales calls. The software could take customers' conversations, instantly transcribe them and propose responses used by successful sales team members.
Actor-singer Hu Ge came onstage to recite one half of a poem; Baidu's smart software read the second half, imitating his voice. Baidu's founder said such technology could be used if "you have to work very late every day, and your kid wants to listen to you telling a story."
A fun video showed off how Baidu's translation app could help a Chinese cab driver communicate with a foreigner. But unfortunately, only a few people had simultaneous translation headsets when Nvidia CEO Jen Hsun-Huang came onstage for a keynote. He spoke mostly in English to describe plans for building sophisticated maps to guide autonomous cars.
Because of the language barrier, many spectators pulled out their phones to chat on WeChat -- an app made not by Baidu but by another Chinese tech giant, Tencent.