Here’s How Baidu Is Leveraging Its Artificial Intelligence Capabilities

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Baidu (NASDAQ:BIDU) is using its artificial intelligence (AI) capabilities in unique ways, demonstrating that this technology can potentially open several new lines of business for the company. Recently, Baidu teamed up with KFC to open a new “Smart Restaurant” in Beijing which uses facial recognition technology to make order recommendations. Image recognition hardware installed at the restaurant can scan the consumer’s face and make recommendations based on the customer’s profile (age, gender) or previous order history. This new feature will be launched at just one restaurant as the company experiments with AI in this business. However, this is an indication that AI is likely to be a key growth driver for Baidu in the next few years. The company is experimenting with this technology in several business lines, including autonomous cars among others. We believe Baidu’s growth in the long term can be driven by innovative use of this technology.

Increased Focus On Artificial Intelligence In New Lines Of Business

Baidu’s experiment with KFC is an indication that the company is ready to innovate with its expertise in the artificial intelligence space. According to Baidu, its voice and image recognition technology are fairly mature and the company is working on developing natural language processing and user profiling. With a strong focus on this technology Baidu is looking at innovative ways to monetize this capability. While its “Search Services” segment is the company’s key revenue driver, AI can not only support growth in this business but also create new revenue streams. In addition to increasing user engagement and efficiency in its existing search business, leveraging AI for new lines of business can drive growth for Baidu in the long term. While the “Smart Restaurants” idea holds some potential, it is more noteworthy as an indication of how AI can be used in a variety of consumer-facing businesses.

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