IA: In crisis, Baidu plans to become the market leader, including in e-health

In early February 2017, the web giant has shut down its business unit dedicated to mobile health care to refocus on research more artificial intelligence-enabled healthcare research and innovation

Part of the two-year-old unit’s operation team will be merged into the group’s AI business and search business.

According to Kirk Boodry, an analyst of the British research firm New Street Research, cost efficiency would be behind the decision to close the mobile health care unit, which "was apparently under-performing" relative to the other units of the company.

The health care business unit set up by Baidu was focused on internet-enabled services, such as helping people make hospital appointments online or consulting doctors for medical advice online. Robin Li, the CEO of the group, describes these technologies as "low-tech". The businessman said recently in a forum that artificial intelligence could "redefine" the health care industry. He believes that AI and big data technology could be used in genetic testing and facilitate the development and the testing of new medicines.

the January hiring of Lu Qi, an expert in artificial intelligence, as the group president and chief operating officer is also part of Baidu's strategic restructuring. The former Microsoft executive has been recruited the company’s core online advertising business took a big hit from a paid medical listing scandal in 2016: a young patient suffering from cancer died after seeking out an alternative treatment from a paid listing on Baidu’s site. This accident tarnished the company’s reputation and triggered Chinese government's tighter control over online advertising.

The Chinese group has since decided to focus more on artificial intelligence. In the healthcare sector, the firm launched in October 2016 Melody, an AI-powered conversational bot which is able to provide relevant information to doctors to to assist with recommendations and treatment options.

However, Baidu had to overcome serious challenges in terms of strategic positioning, New Street Research technology analyst Kirk Boodry said. "Growth in its core internet advertising business is slowing and competition from social media is increasing, he said. The company has good technology credentials but it is hard to monetize AI research. Over time, efforts like autonomous driving could be the way to do that but the business model has yet to be developed."

Founded in 2000 by Robin Li, the 7^th richest man in mainland China, the Chinese internet giant plans to become the leader in the development of artificial intelligence in the country. In 2015, it was the major player in Chinese internet with a daunting 80.80% market share - 9.20% for Google -, revealed the marketing blog China Internet Watch. The company also launched a in 2016 a $200 million fund (€ 189 million) focused on AI, augmented reality and deep learning and a  $3 billion fund for tech investment, said Reuters.

But this ambitious project dedicated to artificial intelligence is countered by the occurrence of setbacks for the company.

On March 21, Andrew Ng announced his departure from the company. The artificial-intelligence researcher was a valuable asset for the company in the field of AI. The ex-Google employee was recruited to internationalize the company and to embody the company's values and vision in the global market of artificial intelligence. He remains one of the world’s leading experts on artificial intelligence.

After the announcement of his resignation, Baidu’s shares fell 4% on March 22 compared to the peak recorded two days before and the Chinese newspapers has begun speculating on the capabilities of the Beijing group.

This bad news for the group has been preceded or followed by other setbacks.

Despite this main challenges, the Chinese tech giant doesn't give up. On March 31 he announced the opening of a second laboratory dedicated to AI in Silicon Valley, in addition to the one launched in 2014 in Sunnyvale (California).

The new facility will employ 150 researchers, said the Chinese media group Caixin.

Analysts said Baidu would turn into a group focused exclusively on artificial intelligence. The firm sees AI as a "key strategic focus for the next decade," said Robin Li. At the beginning of 2017, the group CEO has named its chief operating officer Lu Qi to head its newly established intelligent driving group, a Chinese expert trained in the United States and reputed to be an expert in artificial intelligence, ensured Robin Li. With the recruitment of this leading AI expert, who holds 40 patents in the US, the company is confident in the ability of Baidu  to become "a global leader in artificial intelligence."

Baidu wants to become an AI leader in different sectors, including in healthcare, in automotive and in electronics. The company has started working on the creation of an autonomous car in 2014 and a connected speaker to compete with Echo, designed by Amazon. In March, Baidu Researchers have also proved  that AI could retain information recorded in the past, while assimilating new knowledge, which is an important step in the future of this new technology.

However, Baidu is not the only Chinese company to invest in AI. In March, Didi Chuxing, the "Chinese Uber", opened its first Californian R&D center focused on artificial intelligence. Tencent and Alibaba are also investing heavily in the sector. The National Development and Reform Commission of the People's Republic of China (NDRC), a central planning agency in the People's Republic of China, revealed a program to develop a market worth more than $15.26 billion (€ 14bn) by 2018.