Baidu Holds Smart Tickets

On November 17, Baidu released its 2021 Q3 financial report.

Compared with several international cloud computing service providers, Baidu Smart Cloud’s performance can be described as dazzling. In the third quarter, Baidu’s intelligent cloud business revenue increased by 73% year-on-year, and has grown by more than 70% for two consecutive quarters. During the same period, Amazon’s AWS, Google Cloud, and Microsoft Cloud grew by between 39% and 50%.

After the earnings report was released, Baidu’s U.S. stock price rose more than 2% in pre-market trading. In the eyes of investors, the positioning of AI intelligent companies is gradually becoming firm.

Robin Li said in the financial report, “Baidu is bringing innovation to consumers, enterprises and the public sector through our commitment to artificial intelligence.” The voice is calm. For entrepreneurs, the phased data seems to be just the previous strategic layout. The inevitable result is expected.

Where does high-level growth come from? You might as well search more. This Internet company, which is famous for its technology, has recently popped up a related word that is “landing”.

“Robotaxi landed in Guangzhou”

“Carrot Run and Autopilot Lands in Shanghai”

“ACE intelligent transportation solution has landed in more than 30 cities”

Smack it carefully, there are actually several meanings behind the word “landing”: it means that in a new virgin land, the investment in technology will finally bear fruit, and the realization of commercial applications will be accelerated.

It is more likely to mean that Baidu has held the ticket of this intelligent era, and the new growth curve is stable?

Intelligent Cloud Exponential Growth

“In the next 3 years, the proportion of non-advertising revenue will exceed advertising revenue.” Robin Li once made a bold statement at the Q1 earnings report in 2021. The speech of the technical people is not aimless.

Before 2020, Baidu’s financial report divided its revenue into two major sections: “online marketing services” and “others”, which is why some people once labeled it as an “advertising company”.

But now, that label can rightfully be torn off.

After 2016, the proportion of “online marketing services” revenue has been shrinking, and it has shrunk to 68% by 2020.

By Q3 2021, Baidu will achieve revenue of 31.921 billion yuan and adjusted net profit of 5.09 billion yuan. Among them, the advertising business increased by 6% year-on-year, and the non-advertising business increased by 76% year-on-year.

Originally, in this third quarter, the epidemic, coupled with the multiple impacts of education, real estate, and tourism, inevitably contracted the entire advertising industry.

The focus of the non-advertising business is the new AI business represented by intelligent cloud, intelligent driving and other businesses. Their growth trend is Li Yanhong’s confidence to face the future.

“In the third quarter, Baidu’s smart cloud revenue surged by 73% year-on-year, driving Baidu’s core revenue to achieve good performance again.” Baidu CFO Luo Rong revealed that smart cloud services, smart transportation, smart devices, smart electric vehicles and automatic The diversified layout of AI businesses such as driving travel services will lay a solid foundation for Baidu to achieve long-term growth.

Recently, Baidu has won orders from Shanghai Huangpu, Zhejiang Tongxiang, Yunnan Lijiang and other cities to help them carry out digital transformation and achieve the goal of smart cities.

In the intelligent transportation section, Baidu ACE intelligent transportation has been adopted by 24 cities, a year-on-year increase of two times, and the contract amount exceeds 10 million yuan. Baidu has successively won bids for vehicle and road coordination projects in Shaoxing, Cangzhou, Yangquan and other places, with a single order value of about 150 million yuan.

According to Canalys data, the average growth rate of China’s cloud market in 2021 is 43.6%, and the growth rate of Baidu Smart Cloud has far exceeded this level.

From intelligent cloud to intelligent driving, the effect of landing brings benign feedback of financial data. Admit it or not, with the advent of the era of AI intelligence, Baidu, which has been silent for a long time, is walking out of the trough of the U-shaped curve, and also out of the “loneliness” described by Robin Li in the shareholder’s open letter.

Coincidentally, on the same day that Baidu released its Q3 financial report, another Internet giant announced that it would release cloud products and build an enterprise-level technical service platform.

Will there be any new impact on Baidu Smart Cloud, which has established a first-mover advantage?

It is not to be dismissive. A company has accumulated savings for ten years, invested hundreds of billions of dollars, and built barriers with technology. New entrants may have a little sense of awe.

Intelligent driving blooms more

Four years ago, Robin Li took an unmanned car to the Fifth Ring Road and received a ticket for autonomous driving. He was not very depressed at the time, but said, “Mass production is not far away.”

Four years later, Li Yanhong sent another letter to all staff, “In the second half of 2021, Apollo intelligent driving will usher in the peak of mass production, and a new car will be launched every month. 1 million units.”

Some people say that intelligent driving is Baidu’s entire bet. This statement is bad. Investing nearly ten years in one thing and spending hundreds of billions of funds can only be said to be determined enough.

Since 2013, Baidu has begun to deploy intelligent vehicles. In the direction of “bicycle intelligence” in China, it is rare to achieve L4-L5 level of unmanned driving, and the accumulation of technology can be said to be unrivaled. This is why Baidu’s car-making is more anticipated than Xiaomi’s car recently.

It is understood that Jidu Automobile has started software development work for the simulated prototype car in September, and the current SIMU Car is in the early stage of research and development.

On September 17th, DeepWay, a new strength in truck manufacturing jointly built by Baidu and Shiqiao, launched the first intelligent new energy heavy truck with full positive design and development – Xingtu 1st generation. DeepWay announced that it will quickly access the Shiqiao trunk line logistics network, and promote the commercialization of L4-level autonomous driving technology in freight scenarios through actual cargo operations.

Baidu Apollo also launched the self-driving minibus Apollo II, which is committed to becoming a mobile space in the intelligent era, which can flexibly meet diverse needs and provide customized intelligent mobile services for public travel, mobile police, health management and other scenarios.

These are the full-stack capabilities of Baidu Apollo’s autonomous driving technology.

Previously, Google’s Waymo took the Android route in mobile phones, trying to open the system to car manufacturers lacking technology. However, no one has paid for this road for a long time. The shortcoming is that the safety performance of the car is no better than the mobile phone, and the guarantee of the safety of autonomous driving lies in the data. Unlike Tesla running all over the street, Waymo suffers from the amount of data.

Baidu has realized that high-standard autonomous driving also needs to improve data accumulation in order to be more convincing. It defines itself as an “urban transportation operator”, which is not limited to bicycle intelligence, but also focuses on intelligent transportation and creates a smart city.

Baidu believes that the final outcome of urban transportation in the future is like a telecom operator. Each city has one or more operators, which can aggregate the digital information of urban transportation and provide external services on this basis. Governments can purchase public transport services using cloud services or subscription fees.

Under the guidance of this strategy, Baidu has stepped up the pace of landing cities.

In just a few years, Baidu’s Apollo self-driving travel service has covered five cities including Beijing, Shanghai, Guangzhou, Changsha and Cangzhou, covering an area of ​​more than 600 square kilometers, and has obtained 411 test operation licenses. The largest and largest autonomous driving service provider in the road network.

According to public information, Baidu has more than 3,400 autonomous driving patents, and its driverless safety test mileage has exceeded 16 million kilometers.

At this year’s 818 World Conference, Baidu officially upgraded and established an autonomous driving travel service platform – Carrot Run. According to the data, Radish Kuaipao has more than 50,000 orders in a single month in September, and the order volume in Q3 is 115,000 orders, ranking first in the world. If the monthly average order volume increases by 30% month-on-month, the average daily order volume of Carrot Run Q4 will reach 1,500 orders, and the total number of orders in a single quarter is expected to exceed 150,000 orders.

Not only has it distanced itself from Waymo in terms of data, Baidu Apollo is also getting closer and closer to the operational goal of large-scale commercialization.

In Bohu Finance’s view, following Robin Li’s “engineering” thinking, Baidu’s autopilot presents a commercialization scenario in the second half of the decisive battle: both Tesla’s assisted driving system ANP, which can continuously run data; The data obtained by self-operated and self-driving travel services such as Carrot Run is known by the industry as the gold in autonomous driving data; as well as vehicle-road coordination under intelligent transportation, the infrastructure guarantee is more comprehensive.

Baidu Apollo plans to deepen the cultivation of Beijing-Tianjin-Hebei, the Yangtze River Delta, and the Greater Bay Area in the next three years, covering 30 cities across the country, and building a fleet of 3,000 L4-level autonomous driving vehicles to meet the autonomous driving travel needs of 3 million users.

Intelligent driving, after all, is to “land” in the smart city, and the pattern of Baidu’s intelligent driving is also opened. We can no longer understand it in terms of bicycle thinking.

The ecological capability of “integration of software and hardware” that cannot be ignored

What stage has Baidu Smart Cloud entered?

On July 29, Baidu Smart Cloud announced a comprehensive upgrade of its strategy, architecture, products, and ecology, and launched a new architecture of “Cloud Intelligence 2.0”, through the output of smart technology and practical experience.

Based on this new strategy, Baidu Smart Cloud takes the cloud as the base, the flying paddle as the core, and the ecology as the wings, and upgrades the architecture to 2.0, including a three-layer structure of “digital base, intelligent engine and full-scene application”:

The digital base includes basic platforms such as basic cloud, database, Internet of Things, edge computing, blockchain, video cloud, big data, cloud native development and map services, as well as security escort.

The intelligent engine, based on Baidu’s self-developed deep learning open source open platform Fei Pao, is based on Baidu Brain, a large-scale AI production platform that integrates software and hardware. It also provides talent training services to help companies build sustainable AI talent organizations.

With the support of the digital base and intelligent engine, Baidu Smart Cloud is working with ecological partners to create full-scenario applications in smart manufacturing, smart city, smart finance, smart healthcare and other fields.

This means that in this pool, you can freely combine and apply technical basic modules like Lego. Its ductility and imagination space are immeasurable.

The cognition that needs to be emphasized is that the smart cloud, Apollo, and Xiaodu smart speakers are actually just the branches and leaves of the AI ​​tree trunk. The chip provides the underlying hardware computing power, the intelligent assistant and middleware provide software integration, the intelligent output unit provided by Baidu Brain, and the terminal scenarios provided by Apollo and Xiaodu speakers.

In addition to these, the fertile soil of AI will produce more applications and bring broader commercialization prospects. Looking at China, there is no technology company that can achieve such a comprehensive AI layout as Baidu.

After all, in the field of “hybrid intelligent platform”, if China wants to have a company that can compete with Google, it can only be Baidu.

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