Search giant Baidu is reportedly seeking to spin off its autonomous driving unit, a move that comes just days after the company reported its first quarterly net loss since listing in 2005.
The company is currently looking for external investors for the business amid increased financial pressures, Caijing reports, citing a person close to the company as saying.
A Baidu spokeswoman denied the claims when contacted by TechNode, saying that Apollo, the company’s self-driving platform, is an important part of Baidu’s artificial intelligence (AI) strategy.
The prospective spinoff comes after a tough first quarter for Baidu. The company reported a loss of nearly RMB 330 million (around $49 million) in the three-month period ended March 31. To compare, the company reported RMB 6.7 billion in net income during the same period a year earlier.
Driving these losses was a considerable increase in spending. The company’s total operating costs and expenses reached RMB 25 billion during the first quarter, up from around RMB 16 billion during the same period in 2018. Research and development costs increased by 26% year on year.
Baidu CEO Robin Li said in 2017 that the company would seek to spin off its self driving unit when it is mature enough and is in need of more funding. “When we think [a] business is promising enough and it has reached a stage that running it independently or introducing more strategic investors would make sense, we will do that,” Li said at the time.
Baidu has been named one of China’s AI champions and is tasked with spearheading the development of autonomous vehicles in the country. The company is testing its self-driving cars on the roads in China and the US. According to California’s Department of Motor Vehicles, Baidu’s AVs required human drivers to take over every 330 kilometers, compared with Chinese rival Pony.ai’s 1,600 kilometers per “disengagement.”
Meanwhile, the company’s vehicles made up more than 90% of all mileage traveled by self-driving cars in Beijing last year. The company has also started rolling out a fleet of robotaxis in Changsha, the capital of Hunan province in central China.