Robin Li is one step ahead of Musk

Not long ago, the news that Tesla will release Robotaxi in August stirred up the market. The industry also expects that this "catfish" that has changed the traditional automotive industry will once again make the unmanned driving industry undergo great changes.

Unexpectedly, Tesla was "cut off" by Baidu.

At Apollo Day 2024 on May 15, Baidu revealed that its Robotaxi business, Radish Run, will fully enter a profitable period in 2025.

This means that with the blessing of the large model, Baidu's high-hopeful autonomous driving business is ushering in an important milestone in commercialization. In the past, due to the constraints of technology and hardware, the cost of driverless smart cars has remained high, and the road to commercialization has been frequently blocked.

Chen Zhuo, general manager of Baidu's autonomous driving business department, revealed that at the beginning of this year, with the significant improvement of time and space coverage and operational efficiency, the revenue of Radish Express increased by 9 times, and the loss was reduced by more than half. From May 15, the first batch of sixth-generation unmanned vehicles delivered will be put into use in Wuhan, and the deployment of 1,000 unmanned vehicles will be completed within the year.

Chen Zhuo said that with the successive use of thousands of sixth-generation unmanned vehicles, the revenue growth rate of Radish Express will be faster, and it is very close to the critical point of breakeven. "Our goal is that by the end of 2024, Carrot Run will break even in Wuhan and fully enter the profitable period in 2025. Carrot Express will become the world's first commercially profitable autonomous driving service platform. ”

Baidu has been waiting for this result for ten years.

Su Tan, general manager of the intelligent car business department of Baidu's intelligent driving business group, believes that AI in the past has a certain recognition ability, but it cannot handle complex scenes. However, the scenarios faced by the intelligent cockpit are becoming more and more complex, and for highly complex scenarios, end-to-end large models are more advantageous to solve problems.

At the press conference, Baidu released the world's first large model that supports L4 autonomous driving, the Apollo ADFM (Autonomous Driving Foundation Model). The model reconstructs autonomous driving based on large model technology, which can take into account the safety and generalization of the technology, achieve more than 10 times the safety of human drivers, and achieve city-level global complex scene coverage.

Radish Express also released the sixth generation of unmanned vehicles, applying the scheme of "Baidu Apollo ADFM large model + hardware products + security architecture".

Compared with the previous generation of cars, the cost of the sixth-generation unmanned car has dropped by 60%, and the price is only 200,000 yuan, setting a new industry record. At the same time, after the completion of the construction of the automatic operation network of the carrot fast unmanned vehicle, its operating costs will be reduced by 30%. With the continuous optimization of autonomous driving technology and the efficiency of people and cabins, the service cost will be further reduced by 80%.

Wang Liang, chief R&D architect of Baidu's intelligent driving business group and chairman of the IDG technical committee, believes that with the reduction of chip costs, the cost of unmanned intelligent vehicles is expected to be further reduced, entering the range of 100,000 yuan.

Wall Street also learned from Baidu that as of April 19, the cumulative number of service orders for Carrot Express exceeded 6 million. In the first quarter of 2024, Carrot Express provided about 826,000 services to the public, a year-on-year increase of 25%; Radish Express has an operating area of more than 3,000 square kilometers in Wuhan and serves more than 7 million people.

The decline in cost and the increase in service times and area are the secrets of Radish Express's ability to take the lead in making profits in Wuhan. And this plan in Wuhan is replicable. Xu Baoqiang, general manager of Baidu's autonomous driving technology department, revealed that based on the autonomous driving model, Baidu has fully equipped the technical capabilities required for city-level autonomous driving travel services. In the face of a new city, it only takes half a year to complete the preparation of the fully autonomous driving service in the whole domain. In the future, this verification time will be further shortened, and autonomous driving will be realized wherever there are Baidu maps.

After more than a year of technology competition, how to apply and commercialize large models is becoming a common proposition for the entire industry. The wave of large models is surging, but how to land safely and achieve profitability is still a fog for players entering the game.

With the help of the carrot run, Baidu found a feasible way in the large-scale model competition. This is undoubtedly a bombshell for the entire industry. In its body, it seems that we can see the possibility of large models to reshape industries and applications.

In the past 11 years, Baidu has invested more than 140 billion yuan in research and development of "All in AI", and it has finally achieved good results. In Baidu's earnings call on May 16, Robin Li also emphasized that the company is shifting from Internet-centric to artificial intelligence-first, and actively promotes the use of Wenxin large models to reconstruct To C and To B businesses.

It can be seen that Baidu has also made a lot of progress in reconstructing Baidu's business with AI.

According to the financial report, in the first quarter of 2024, Baidu's total revenue will reach 31.5 billion yuan, and the net profit attributable to Baidu (Non-GAAP) will be 7.011 billion yuan, a year-on-year increase of 22%; Baidu's core revenue was 23.8 billion yuan, and the net profit attributable to Baidu's core (Non-GAAP) was 6.628 billion yuan, a year-on-year increase of 26%.

Specifically, Baidu Intelligent Cloud's revenue in the first quarter was 4.7 billion yuan, a year-on-year increase of 12%, and it continued to achieve profitability (Non-GAAP). Among them, generative AI contributed 6.9% of revenue, and the proportion is gradually expanding.

Institutions, including Morgan Stanley, are also optimistic about the boost of AI to Baidu's business, such as the growth of cloud service revenue, which has the most direct impact on AI, is expected to continue to grow in fiscal year 2024. Morgan Stanley said it is optimistic about Baidu's dominance in China's AI field.

Robin Li also revealed at the earnings conference that following the cooperation with China's Samsung and Honor last quarter, this quarter, Xiaomi, OPPO, vivo and other mobile phone manufacturers have access to Wenxin's large model API. In addition, the cooperation field of large models is also expanding from mobile phones to PCs and electric vehicles, and Lenovo and NIO also reached cooperation with each other during the quarter.

And Baidu's basic disk is also being reshaped by AI. Currently, 11% of search results on Baidu Search are generated by AI. Robin Li also confidently said, "Search is most likely to become a killer app in the AI era." ”

In the past, Baidu was always one step ahead in the investment in AI technology, and it seemed to have become the "Whampoa Military Academy" of the unmanned driving industry, but in the final pace of landing and commercialization, it always seemed unsatisfactory. Now, Baidu has finally found some directions, and the next step is how to further sort out these explorations so that the performance can be further improved. This will be a key battle for Robin Li to turn around in the AI era.

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