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Baidu chip unit reported at $2B valuation; China dominates AI, report finds

Chinese technology leader wins bid to begin 5G smart highway

Baidu’s AI chip could be valued at $2 billion. (Photo: Shutterstock)

Baidu Inc. (NASDAQ:BIDU), one of China’s largest multinational technology companies, has completed a fundraising round on its artificial intelligence (AI) chip, Kunlun, that would value the business at $2 billion, a source told Reuters. The round, which generated an undisclosed amount of funding, was led by CITIC Private Equity Funds Management (CPE), and is said to include IDG Capital, Legend Capital and Oriza Hua. 

The Kunlun chip has been praised for its development of autonomous vehicles and is used to improve mobile phone camera quality, speech and voice recognition. With AI capabilities, the device can perform offline and still perform system duties like driving, without having to reach out to the cloud for transportation data. The imitation-learning chip is preferred by some users because their data stays on their device rather than being transmitted over the cloud.

Following the report on Monday, Baidu announced it has received qualifications from the Cangzhou traffic authorities in China to operate 35 different commercialized autonomous driving operations and 10 vehicles for driverless testing.

This guidance from Cangzhou will allow Baidu Apollo to conduct the first open-road, driverless testing within the city. The program has received permission previously from Chinese cities Changsha and Beijing, as well as from California in 2020.

The Baidu Apollo fleet consists of 500 vehicles, with open-road tests conducted in 30 cities around the world. The company’s Robotaxi service has carried 210,000 passengers and is available in Beijing, Changsha and Cangzhou, with plans to move into 30 more cities over the next three years.

Earlier in March, Baidu announced it had won a bid to build a 30-kilometer smart highway in the Singapore-Sichuan Hi-Tech Innovation Park. This 5G intelligent driving zone would promote the city of Chengdu’s commitment to bring together smart transportation, industrial Internet and intelligent health care services to become the benchmark for smart city developments. 

Will the US catch up to China’s AI dominance?

The National Security Commission on Artificial Intelligence (NSCAI) recently issued a 756-page report to the United States government warning that “America is not prepared to defend or compete in the AI era.” The commission stated that the government was not ready to confront the potential of AI technology and sophisticated cyber weapons China could create.

The report described areas of development necessary to make progress comparable to China’s achievements. The NSCAI suggested ways to recruit digital talent into the government and boost domestic microelectronic manufacturing, diminishing U.S. reliance on foreign-made electronics. The committee urged the U.S. government to pay close attention to foreign investment in American technology and to double the country’s AI research and development budget to $32 billion a year.

This AI gap did not happen by chance; it was a goal the Chinese government set out to achieve. 

In 2017, China announced its ambition to develop the skills and educational resources to accomplish these breakthroughs by 2025, with a desire to be a global leader in AI by 2030.

China’s AI power does not just come from Baidu. Other technology leaders have contributed to China’s dominance. In 2020, Alibaba (NYSE:BABA), the Chinese leader in e-commerce sales at $72 billion, partnered with autonomous taxi companies. ByteDance, the TikTok creator, and Tencent (HKG:0700), the creator of WeChat, use AI-powered platforms to integrate products and services into the user’s daily life.

“We are at the beginning of the beginning of this new era of competition,” the NSCAI report explained. “The United States should invest what it takes to maintain its innovation leadership, to responsibly use AI to defend free people and free societies, and to advance the frontiers of science for the benefit of all humanity. AI is going to reorganize the world. America must lead the change.”

Grace Sharkey

Grace Sharkey is a professional in the logistics and transportation industry with experience in journalism, digital content creation and decision-making roles in the third-party logistics space. Prior to joining FreightWaves, Grace led a startup brokerage to more than $80 million in revenue, holding roles of increasing responsibility, including director of sales, vice president of business development and chief strategy officer. She is currently a staff writer, podcast producer and SiriusXM radio host for FreightWaves, a leading provider of news, data and analytics for the logistics industry. She holds a bachelor’s degree in international relations from Michigan State University. You can contact her at [email protected].