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Baidu is not worth betting on AI?

via:博客园     time:2018/11/25 15:57:55     readed:586


Author Ma Cheng Editor Luo Lijuan

At the Wuzhen World Internet Conference, Li Yanhong, chairman of Baidu Company and CEO, was at the forefront of science and technology, comparing artificial intelligence to the next 50 years.

Robin Li seems to be very impressed with Baidu AI. Since the announcement of All in AI in mid-2017, Baidu's business restructuring has begun to take shape. In November 2018, at the Baidu World Congress, every participant received a "Baidu AI Industry Introduction Manual", which mentioned more than 50 cases of AI landing, covering 15 industries such as travel, medical, financial, retail and logistics, 90% of which were to B customers. On the scene of the conference, Apollo and FAW's L4 driverless car were in the most prominent position in the venue. When Tencent announced that it would set up an unmanned driving team, Baidu's Pollo system had been upgraded to the third generation, and cooperated with FAW, Volvo and other companies. The first batch of unmanned buses and unmanned vehicles were on the road.

Robin Li also excitedly demonstrated the small intelligent speakers, tested the eye screening system, and explained the landing opportunities of Baidu AI from agriculture, industry to medical treatment and other fields.

At the beginning of 2018, Robin Li became the first Chinese Internet entrepreneur to be on the cover of Time. On that day, Baidu's market capitalization was 88 billion 800 million dollars, which ended a perfect ending for Baidu's 2017 turnover. It can be said that Baidu has become the top AI company in the domestic comprehensive technology reserve.

However, there are still variables. Lu Qi's departure has brought down Baidu's market value, changed personnel structure, and delayed the achievement of AI business in the financial report. Information flow and search business are still the mainstay of the financial report. In September, Baidu officially launched small programs, starting from the information flow, launched a counterattack against ToC. In the third quarter, the growth of information flow business was recognized by investors.

According to the third quarter results, Baidu's investment in AI research and development has exceeded 7 billion yuan. After Luqi left, Baidu never mentioned the slogan of All in AI. When the giants are transforming to ToB, Baidu, which has taken a step ahead of schedule, is still facing a choice. We need to think about the next step, whether it is worth gambling on AI.

On January 17, 2017, Baidu announced that Lu Qi, former executive vice president of Microsoft, had joined Baidu Group as President and COO. At that time, Baidu was in

Lu Qi took office, soon led a series of business restructuring within Baidu, and the planning

Lu Qi also suggested

Among the six business groups currently set up by Baidu Group, all departments are part of AI strategy, except the search company which mainly operates traditional search engine services. AIG is mainly responsible for all AI technology research and development of Baidu; IDG is mainly responsible for intelligent driving of automobiles; FSG is mainly responsible for Internet financial business; and EBG is also a new business group.

On March 6, 2018, Baidu announced the establishment of the Intelligent Life Group (SLG), headed by Lu Qi himself.

Under the auspices of Lucky,

To B business is the focus of Luqi's attention. DuerOS and Apollo, as development platforms, need to cooperate with enterprises to enable them to expand their influence and ultimately gain profits in the short term.

At the same time, Baidu, which has undergone major renovations, has begun to enter the deep water area. On the one hand, AI business needs a lot of investment, and the landing process must be gradual. The start-up investment of Apollo alone is more than $200 billion. The landing of DuerOS development platform, smart speakers and other hardware need continuous subsidies.

On the other hand, search and information flow services still account for nearly 80% of total revenue, requiring 2C services to supplement AI's huge expenditure, so as to achieve a balance.

Investors close to Baidu have mentioned to all-weather technology that the AI business is too small a percentage of Baidu's total revenue to be used as a basis for its valuation.

In May 2018, Lu Qi announced his resignation. Baidu's share price fell 9.54% that day, and its market value evaporated nearly 10 billion dollars overnight. Since then, the slogan "All in AI" has rarely been mentioned. But from the second half of Baidu Partners Conference and Baidu World Congress, this decline has been controlled to a certain extent, and Baidu's market value is currently maintained at around $65 billion.

Robin Li took the intelligent driving business group and intelligent life enterprise group, which was originally steered by Lu Qi, and carried the banner of Baidu transformation.

AI's To B business is the new beginning of Baidu's transformation. Robin Li has mentioned that the most optimistic application scenario of two AI is intelligent family and two intelligent transportation. These are all areas where Baidu is working hard to lay out its business. In addition to the revitalization of To C business, it also needs to link up relevant business brands.

Before Luqi left, Li Zhenyu and Jingkun were promoted as the leaders of intelligent travel and intelligent life business groups. Both of them were old employees of Baidu. Although they were not technicians, they played a key role in the team. Baidu AI therefore did not erupt a larger wave of resignation.

From the Baidu Developers Conference and Baidu World Congress since then, Baidu has not deviated from the main channel of AI.

However, the problem facing Robin Li at this stage is that, with more than 60% of revenue still relying on search and streaming media advertising, the profitability of AI related businesses needs to be put on the agenda. Meanwhile, the C terminal will be combined with To B business to revitalize the larger market.

After Lu Qi's drastic reform, Baidu is facing a new situation in its transformation. On the one hand, the development of information flow business in 2017 has gradually become the key to the entry of To C traffic, such as revitalizing handsets and short videos, further empowering advertising marketing and becoming revenue-bearing side by side with search business; on the other hand, Baidu also hopes to focus on enterprise services (B-end) company, to SAP, Oracle, Microsoft. Wait and see, through deep cultivation of AI and cloud computing, we will fight back in the areas of automatic driving, which has the advantage of first-mover.

But in the eyes of investors,

As the focus of All in AI, To B business in artificial intelligence field is developing rapidly. Baidu AI's three main businesses

As the technical foundation of Baidu, Yin Zhiming, general manager of Baidu Cloud, will first publicize Baidu Cloud's "ABC IOT" Trinity Strategy in almost every occasion.

In August, Baidu cloud took the lead in launching AI to B platform. This is Baidu AI technology, AI capacity output platform, the goal is to accelerate Baidu AI in the enterprise market commercialization process. Through in-depth learning, natural language processing and other technologies, it has been widely enabled in manufacturing, finance, urban management, new retail and other fields. This is the focus of developing B-terminal business from Baidu cloud.

In the cloud computing business, Baidu started late and entered the market in 2015. Compared with the market share of more than 50% of Aliyun, it is not conspicuous in the industry. But on Baidu's platform, Baidu cloud is an important link to various businesses.

Baidu cloud also hopes to gradually break through the public on its

This product, which cooperates with FAW, is scheduled to go off-line in small batches in 2019 and put into operation in more cities in large quantities in 2020.

Driverless is the blue sea, and then forward is a piece

Apollo is an open source project that can provide complete software, hardware and service solutions. It attracts partners in the automotive industry chain through open source, data, API, cloud interface and so on. At present, the number of partners of Apollo Autopilot Open Platform has reached 131, including Volvo, Daimler, Ford, Bosch and other well-known international brands, as well as Jinlong Bus. Such achievements also make Baidu the largest intelligent driving software platform in the world.

Lu Qi also made clear in Baidu: artificial intelligence technology the best way to commercialize is to create an ecosystem. Li Yanhong also believes that as long as Apollo ecological development is good, realisation is not a major challenge.

In January this year, Baidu said it would sell a series of hardware in the future and plug into the car to run their software to achieve the automatic driving function. This hardware is ACU (Apollo Computing Unit) referred to by Robin Li. In addition, Baidu also has some soft and hard solutions, such as the parking solution for passengers, which is also a way of realizing.

But Baidu in the construction of Apollo ecological process, it seems a bit too urgent. According to a report from 36 Krypton, after the implementation of Baidu's free driverless Apollo program, there are still some KPI, that must complete a certain number of partners every month at such a request.

In the second quarter 2018 earnings report, Baidu highlighted the development platform of DuerOS. This is the only AI application ecological platform in China, covering hardware, framework, platform, development of ecological, ecological application system and terminal hardware. This year, DuerOS has been upgraded to 3.0. Through voice recognition technology, it achieves wake-up function and can be mounted in intelligent devices such as smart speakers.

Since DuerOS was launched in 2015, the industry has become the Red Sea of speech recognition, and every company wants to peddle its own operating system. DuerOS card has not been paid attention to by the high-level in the competition with Aliyun and Technological University Xunfei. After Lu Qi took office, he quickly upgraded the Department of secret service into a business group, and began to seek a business breakthrough and seize the market process.

The development of DuerOS has been tortuous.

At the Baidu World Congress in 2018, Jing Kun, general manager of Baidu Intelligent Life Group, announced that DuerOS was the largest carrier in the industry. Behind this, Baidu has invested a lot of money in DuerOS. In order to expand the number of DuerOS terminals, Baidu has invested in video technology and video cassette fishes at home. In order to enrich the content of DuerOS, Baidu has continued to invest in Baidu Video, Vertical and Horizontal Literature, Dragonfly FM, Pear Video and Renren Video and other content companies.

This also directly leads to the increase of content cost. According to Baidu's latest Q3 financial report, the content cost paid by Baidu is also rising. In Q3 financial quarter, Baidu's content cost was 6.7 billion yuan, up 73% year-on-year, which is further higher than Q2's 68%.

In 2017, the giants saw the potential of smart speakers as the entrance to smart home. Ali, Jingdong, millet and other companies launched a round of subsidies war, and the price of speakers kept falling. In the Red Sea, Baidu originally planned to take a differentiated high-end route combining its technological advantages. In February 2017, Baidu acquired Raven Technology and began to enter the smart speaker market. In November of the same year, Baidu released its first smart speaker, Raven H, at a price of 1699 yuan. However, there is no need for smart speakers for Chinese users at present. Under the situation that the average price of the industry is less than 500 yuan, not many people buy for Baidu.

Since then, Baidu has changed its strategy and joined the price war. In March, Baidu and Xiaoyu jointly built a smart speaker with screen at home, the price dropped to 599 yuan, and then further reduced the price. In June, Baidu released a smart speaker with a price of 249 yuan and a taste price of 89 yuan.

According to Canalys data, in the third quarter, Baidu smart speakers shipped 1 million units, an increase of 711% annually, the fastest growth among all manufacturers. Now it has surpassed Jingdong and ranked among the top three in China's smart speaker market.

So far, Baidu has made a significant breakthrough in intelligent hardware, which is of great significance to Baidu. Baidu used to rely more on software systems such as DuerOS to support hardware manufacturers, but now it can also occupy a place in the hardware market.

At the same time that Baidu vigorously propagandized the prospect of artificial intelligence, Lu Qi planned

Information flow has become the era of mobile Internet

In 2017, Baidu started its information flow business, and said that it has accumulated 10 billion yuan to content producers. All individual and institutional content producers can be stationed in 100 companies to participate in the sharing. So far, Baidu has joined the content support battle to compete for information flow and advertising market.

Since then, information flow business has also maintained rapid growth. By Q2 in 2017, the advertising revenue of information flow has also risen rapidly from 10 million per day in Q1 quarter to 30 million per day. In 2017, the revenue of information flow business will exceed $1 billion.

Baidu App is the most important carrier of Baidu's content and service ecology. It aggregates good-looking videos, national videos and Baijia numbers, and recently launched small programs to further grab traffic.

According to the latest data, Baidu App has 160 million active users, more than 6 billion search responses per day, and 15 billion recommendations per day. The usage time of information flow products increased by 68% over the same period last year.

In a conference call for the third quarter of 2018, Li Yanhong noted that information flow ads and search ads are now generating substantial returns for advertisers.

It can be said that compared with AI business, the effect of information flow is more immediate. This is due to the good foundation of search business and the ability of AI big data.

Baidu is trying to change users'habits with information flow. In the PC era, users go everywhere through Baidu search engine, but now, Baidu wants users to come in through search demand and remain in Baidu App. To retain users, Baidu App's strategy is to rely on small programs to provide services, relying on hundreds of pictures and text, national video, good-looking video, live broadcast, paste bar, dynamic novel and other content.

On the other hand, investment in AI is increasing. After Luqi left, Baidu continued to invest heavily in artificial intelligence, with annual R&D expenditure exceeding 10 billion yuan.

Baidu's management said in a conference call after Q3 earnings that revenues from the AI business and the information flow business had exceeded 20 percent of the total revenue. In the second quarter, the AI business and

At least in several earnings reports released in the past year, Baidu did not disclose AI's specific revenue, only mentioning technological breakthroughs and innovations. Although Baidu mentioned in the conference call that in 2019 AI and related business revenue will reach more than 30% of the total revenue, this data has not yet been written into financial reports or other public documents.

Despite the high investment and low revenue at this stage, Baidu has finally seen some gains on the AI front.

The development of To B business line through AI depends on the final landing and profitability. This year, Tencent, Ali and other giants have entered the market, together with many unicorns in the AI field, Baidu AI's final results, which started earlier, still need time to test.

But investors seem to have lost patience. From Baidu's overall market trend, the investment of AI business has affected Baidu's market value.

An example worth learning is byte bouncing. In October, headline parent company byte bouncing announced $4 billion in pre-IPO financing, valued at $75 billion. This valuation has exceeded Baidu's current market value. Since its inception in 2012, byte bouncing has been around the information flow advertising business such as layout, from the headline App of today's information class, to the tremble of short video class, watermelon video and so on. It took only five years to complete the traffic harvesting, and grew into a super unicorn and vigorous traffic platform. According to the latest data of Hengda researchers, information flow advertising can bring nearly 50 billion yuan in revenue to the headlines.

As early as the May 2017 Baidu alliance conference, Robin Li redefined Baidu. He said Baidu would no longer be a Internet Co, but an artificial Intelligent Company. But today, Baidu's revenue, search and information flow advertising, a typical Internet product, still dominates.

At the Baidu World Congress, Li Yanhong put forward a question at the end of his speech: will AI make the world a better place? Baidu's answer is,

However, at present, AI has not made Baidu's market value better. Next step, is Baidu choosing between the AI business of to B and the search and information flow business, dividing the primary and secondary business, or trying to balance the two and move forward synchronously? Reality will give Baidu the answer.

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