INSUBCONTINENT EXCLUSIVE:
Baidu, the Chinese search giant, is spinning out its business unit responsible for utility apps and its mobile ad business to sharpen its
focus on artificial intelligence.
As part of the spin-out, Baidu is selling a large chunk of its equity in the ‘Global DU& business to
as-yet-undisclosed investors
The plan is to sell &a majority equity stake& in order to take Global DU independent
Once the deal is completed — it is targeted at a Q3 2018 timeframe —Baidu share of the business will drop to around 34 percent
Further, the business is likely to raise additional capital for growth.
Spinning out business units is commonplace among Chinese tech
companies, Baidu itself recently did so with its financial services business.
Herman Yu, Baidu CFO, said this latest spin-out will give
Global Du &autonomy and agility in its operation.&
It will also allow Baidu to focus more keenly on artificial intelligence
The firm said it will set up a new global business unit around its AI-powered services, including recommendation engine PopIn, keyboard
appSimeji and other services in the U.S
The plan is to allow these services to work more closely with Baidu AI labs, which include locations in Silicon Valley and Seattle.
Already,
that push has helped Baidu earnings, which had been set back when the Chinese government invested internet advertising focused on medical
services.
Despite the AI push, Baidu has suffered as key personnel departed over the past year.
Last week, Qi Lu, Baidu president and COO
who is also its highest-ranking AI specialist, departed the company due to personal reasons
The exit was unexpected, particularly since the former Microsoft executive only took the role less than two years ago.
Prior to Lu
departure, Baidu lost Andrew Ng— a globally recognized AI pioneer who set up its U.S.-based research labs — back in March 2017
Later in the year, the head of its Silicon Valley lab exited, too.
