Google and Facebook are household names around the world. Baidu? Not yet. Ya-Qin Zhang, president of China’s leading search business, says Chinese companies can become worldwide Internet powerhouses too. One of the biggest fish in China’s market of 730 million Internet users, Baidu is trying to open new revenue streams both domestically and abroad by investing heavily in artificial intelligence.
The company employs more than 1,700 AI researchers, including some at a Silicon Valley research center opened in 2014, and was chosen by the Chinese government to run a new national lab intended to make the nation more competitive in machine learning. Zhang even predicts that the self-driving cars Baidu is developing might be in widespread public use before those introduced by U.S. competitors.
Domestically, revenue growth in its existing search and ads business wilted in 2016 as smartphone sales slowed in China and rivals including Tencent, owner of the popular mobile messaging and e-commerce platform WeChat, closed in.
Baidu’s reputation and ad business were damaged as well by a scandal in which a student died from cancer after a sponsored result displayed by the company’s search engine led him to expensive and questionable treatment.
Zhang, who previously led Microsoft’s research and business operations in China, took time out from meeting staff at Baidu’s U.S. R&D center in Silicon Valley to meet with MIT Technology Review’s San Francisco bureau chief, Tom Simonite. An edited version of their interview is below.
You say that Baidu already has more than a dozen mobile apps used by 300 million people outside China every month. What is your strategy for other markets?
We are very focused on mobile. Our apps are popular in India, Brazil, parts of Southeast Asia like Indonesia. Those are places where the market is very similar to China, but maybe [China as it was] a few years ago—large populations that are mobile-centric. And that gives an advantage over U.S. companies.
Will you offer products in the U.S.?
While we have over 20 million users in the U.S., our focus is on R&D and talent. Right now PhDs from the best Chinese universities are on par with the top U.S. graduates. We have a lab here in the U.S. because we also need more senior talent. The AI team in the U.S. has already developed a new speech-recognition system that is playing a role in our product.
You have spent a lot on artificial-intelligence research. How does that translate into new revenue?
AI will be like electricity, in that it will drive a lot of new business to many industries. We have built a platform we and partners can build on to offer services in anything—health care, education, logistics. As one example, we have a new partnership with Bosch around using our high-definition maps for autonomous and semi-autonomous cars. Many of these [services] will probably be bigger than search, which will continue to be our core business for many years and is also being transformed by AI.
Your chief scientist Andrew Ng, who previously helped establish Google’s machine-intelligence research, left the company recently. Is this a long-term setback?
Andrew is a great guy, and it’s a loss to Baidu here in the U.S. and to the wider company. But he built a large AI team with a lot of talent, and Baidu has a very deep bench of leaders. Even in the U.S. labs, more than 60 percent of employees—on autonomous driving, security, our advertising platform—worked for somebody else.
Why would top talent in artificial intelligence want to work for Baidu’s U.S. lab over that of an American company?
We allow researchers and engineers to make a bigger impact with their work. You get to be part of the two most exciting and dynamic technology ecosystems on Earth: Silicon Valley and the Internet economy of China. The Chinese market gives researchers access to a massive amount of data and a consumer base incredibly quick to adopt new technology.
Baidu is developing and testing autonomous cars in both the U.S. and China. The leading projects in this area are almost all based in the U.S. Where will this technology be commercialized first?
In China the roads and traffic are more complex than in the U.S. But the first batch of applications will be in restricted areas, and it could be easier in China because regulators are more flexible and open-minded. Mayors of many different places want us to try on their roads and are willing to build out special areas for us. A couple of major ports in China want to use our technology on trucks.
Are there areas where you are ahead of U.S. competitors?
I think we deploy new algorithms into our products much faster. The Chinese market is hypercompetitive, and to avoid being beaten by competitors, the cycle of [translating new technology into products] is much shorter than in places like the U.S. Startups in China are even faster than us at making new AI algorithms into products, and that’s something to look out for.
How are Chinese tech companies doing overseas so far?
We’re all just beginning. None of the biggest Chinese Internet companies has proven success outside of China, but I think in the next five years, 10 years, you will see those companies become global. Alibaba, Tencent, Baidu, and others—we are all deploying teams and building up talent. Next will come more products and many more users.