Search giant Baidu will invest RMB 1.4 billion (around $200 million) in technology investment firm Neusoft Holdings, as the pair look to develop smart city, healthcare, and education solutions.

Why it matters: Baidu is one of the biggest artificial intelligence (AI) companies in China and could see a partnership with Neusoft as a means to better scale its products.

  • Baidu has shown continued interest in Neusoft over the course of the year, signing a partnership deal with Neusoft Corporation and investing in Neusoft Medical Systems, subsidiaries of Neusoft Holdings.
  • The internet giant is looking for ways to make up for slowing ad revenue as advertisers tighten their belts amid a slowing economy and regulators crack down on online content.

Details: The deal will make Baidu chief technology officer Wang Haifeng a board director at Neusoft.

  • In the medical field, the companies will work together to develop services including AI medical diagnosis, hospital cloud services, medical big data, and healthcare management, our sister site TechNode Chinese reported.
  • Meanwhile, in education, Baidu and Neusoft plan to develop AI-driven education services as well as online courses.
  • The companies will also work on smart city, smart transport, smart government, and industry cloud applications.

Context: Baidu’s year got off to a difficult start after reporting a quarterly loss for the first time since listing in 2005.

  • The company beat revenue expectations in the second quarter, but its net income fell by 60% year on year.
  • Bytedance and Tencent pose a serious threat to Baidu, as both companies have short video apps that have proven to be a major draw for advertisers.
  • Bytedance moved further onto Baidu’s turf after launching a search engine last month and investing in Wikipedia-like Hudong Baike, competitor to Baidu’s own online encyclopedia.

Chris Udemans

Christopher Udemans is TechNode's former Shanghai-based data and graphics reporter. He covered Chinese artificial intelligence, mobility, cleantech, and cybersecurity.

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