Baidu And China Mobile Collaborate On New AI Technologies

Baidu, Inc. (NASDAQ:BIDU) announced that it has entered into a partnership with a mobile operator company, China Mobile. The terms of the deal have not been disclosed yet.

Both the companies aim to develop new technologies on artificial intelligence (AI), 5G and big data for the telecom and home assistant industry.

Notably, shares of Baidu have gained 54.3% year to date, outperforming the industry’s 24.7% rally.

More on the Headlines

Both the companies revealed that they will work on various aspects to further explore new AI technologies in self-driving vehicles and AI home assistants.

Per the deal, users will be entitled to cellular discounts for using Baidu services, including Qiyi video service, Baidu’s own app and Baidu PostBar. On the AI front, both the companies plan to work on areas like image recognition, voice recognition, and natural language processing by using Baidu's technologies and algorithms.

In addition, they plan to bring China Mobile into Baidu's Apollo platform and develop an autonomous driving system, which is expected to depend on the upcoming 5G cellular technology.

5G marks a revolution in the field of communications and technology. It is expected to connect everything to a network that offers speed and unlocks full capabilities of technologies such as virtual reality, artificial intelligence and the internet of things. The next-gen 5G network will provide 50 times throughput of the currently available standard 4G LTE network. Further, 5G technology is designed to be more power efficient than any other available standard wireless.

Launched last year, Baidu has a major self-driving project called Apollo. This Apollo platform focuses on utilizing the Chinese tech heavyweight’s strengths in artificial intelligence to build a collaborative driverless car ecosystem. As of now, Apollo has already attracted more than 100 global partners including OEMs, Tier 1 suppliers, developer platforms and technology startups.

The recent deal is a win-win situation for both the companies. The partnership will help the companies in developing new products, and strengthening their AI capabilities in growing areas like self driving and home assistant space.

Bottom Line

AI techniques have gained immense traction over the last couple of years due to massive demand for analyzing unstructured data such as tweets, social-media posts, photos and videos across different industries.

Undoubtedly, autonomous driving space will witness more innovation over the next few years, both by technology companies and automakers, including smaller startups. Therefore, Baidu aims at using these AI techniques for further development of the auto industry.

According to Research & Markets data, global software market for autonomous cars is anticipated to grow at a CAGR of 76.1% between 2017 and 2021. This is one of the best places to be in because the technology is being developed. Also, early investors can sell their interest at a hefty premium.

This partnership underscores Baidu’s growing interest in this highly promising space. It appears that the company is flexing its muscles in this space to leverage the concept of consumer convenience, and fun in a bid to impress both customers and investors.

Zacks Rank and Other Stocks to Consider

Currently, Baidu sports a Zacks Rank #1 (Strong Buy). Other top-ranked stocks in the same industry include Groupon (NASDAQ:GRPN) , PetMed Express (NASDAQ:PETS) and Expedia (NASDAQ:EXPE) . While Groupon holds the same rank as Baidu, PetMed and Expedia both carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Groupon, PetMed and Expedia is currently projected to be 6.5%, 10% and 14.5%, respectively.

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