Chinese tech giant Baidu (NASDAQ:BIDU) rose 5.5% over the weekend after it agreed a mapping deal with Tesla (NASDAQ:TSLA) in China.
Baidu will offer its Chinese maps to Tesla as it develops full self-driving (FSD), its plan for autonomous vehicle technology. Baidu already offers a car using the feature.
Baidu stock opened trading on April 29 at $104.88. Shares remain down 9% so far in 2024.
Baidu Stock: A Chinese Tech Star
Before China’s tech crackdown in 2020, Baidu was one of China’s three largest cloud companies along with Tencent (OTCMKTS:TCEHY) and Alibaba (NYSE:BABA). Baidu was building hyperscale data centers like those of American companies like Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL).
Its main niche at the time was search, giving it another close Google comparison. It remains China’s dominant search company with 60% of the market.
While the tech crackdown has done tremendous damage to Baidu stock, the company remains a global tech player. Last year it launched an AI chatbot called Ernie. It has more AI patents than any other Chinese company.
Baidu has been promising self-driving vehicles even longer than Tesla, but has won more government cooperation than the American company.
In 2015, a senior Baidu vice president promised self-driving by 2020. In 2022, Baidu launched the Apollo RT6, an autonomous car with a detachable steering wheel. Baidu won a permit to run robotaxis in Beijing last year.
The deal with Tesla is not unique. Baidu is also working on self-driving with Kia, a unit of Korea’s Hyundai (OCTMKTS:HYMTF).
What Happens Next?
It’s important to note that Tesla’s deal with China is a two-way street. Baidu will be a global competitor as self-driving technology is rolled out.
On the date of publication, Dana Blankenhorn held a LONG position in GOOGL. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
