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.