Baidu, the Chinese search engine company, is rumored to be spinning out their self-driving unit into it's own company. This follows reports that the company saw their first quarterly losses since 2005.
The company is currently looking for external investors for the business amid increased financial pressures, Caijing reports, citing a person close to the company as saying.
A Baidu spokeswoman denied the claims when contacted by TechNode, saying that Apollo, the company’s self-driving platform, is an important part of Baidu’s artificial intelligence (AI) strategy.
The prospective spinoff comes after a tough first quarter for Baidu. The company reported a loss of nearly $49 million in the three-month period ended March 31. To compare, the company reported RMB 6.7 billion in net income during the same period a year earlier.
Driving these losses was a considerable increase in spending. The company’s total operating costs and expenses reached RMB 25 billion during the first quarter, up from around RMB 16 billion during the same period in 2018. Research and development costs increased by 26% year on year.
Baidu CEO Robin Li said in 2017 that the company would seek to spin off its self driving unit when it is mature enough and is in need of more funding. “When we think [a] business is promising enough and it has reached a stage that running it independently or introducing more strategic investors would make sense, we will do that,” Li said at the time.
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