Why Baidu Is Acquiring xPerception
As it increases its focus on artificial intelligence (AI), Baidu (NASDAQ:BIDU) recently announced that it had acquired xPerception, a U.S. based startup focused on computer vision. Following this acquisition, the xPerception team will join Baidu’s AI research team and work on technology which uses sensors and cameras for object detection and path planning. This technology, termed SLAM (simultaneous localization and mapping), is used in autonomous vehicles and virtual and augmented reality. As Baidu looks to build its AI team after the departure of its chief data scientist Andrew Ng, this acquisition can effectively augment its team. Baidu is looking to diversify its revenue streams as its search business struggles under stricter regulations. AI is a key focus for the company, and we believe smart acquisitions can help the company to build its team faster. Baidu recently acquired Raven Technologies – a startup developing voice assisted hardware device for homes – and is looking at innovative ways to use its AI capabilities, such as “smart restaurants” which can use facial recognition technology to make order recommendations. We believe the acquisition of xPerception should help the company build a stronger AI team, which could be key to revenue growth for the company in the long term.
Artificial Intelligence Key Pillar Of Growth
AI is a key part of Baidu’s strategy, and it can provide a boost to the company’s existing businesses of search, maps and offline-to-online initiatives, where voice assisted technology can improve the customer experience significantly. Baidu is focused on deep learning, where computers program themselves based on the large amount of data fed into them. The company is already sitting on a huge data mine built from its search engine, and a research team can leverage this data effectively in building superior AI capabilities. While details about xPerception’s business are sparse at the moment, this startup working on “visual perception” can help in the research for several of Baidu’s AI initiatives such as self-driving cars and virtual reality. As its founders join Baidu’s research team, the company can leverage their capabilities and accelerate its AI initiatives.
We believe AI can become a key differentiator for Baidu’s services and also open several other revenue streams for the company. The company’s strategy to stay focused on this segment and augment its research team through strategic acquisitions can drive growth for Baidu in the long term.
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