Baidu CEO warns that ‘winter is coming’ amid slowing growth, economic restructuring
- Baidu’s 2018 revenue surpassed 100 billion yuan, CEO Li Yanhong says in letter
Baidu chief executive Robin Li Yanhong warned that “winter is coming” as China’s economy shifts to a lower gear, while challenging employees at the company he co-founded to step up their game.
While economic restructuring is “as cold and real as winter to every company,” Li said in a letter to staff on the first working day of the year, the “historical transformation of AI is penetrating various industries, unleashing enormous growth potential and room for upgrade.”
That is giving companies like Baidu a chance to help customers bring down costs, improve efficiency and find new development opportunities, he said.
“Only when the year grows cold do we see the qualities of the pine and the cypress,” Li wrote in the letter, which was verified by the company, citing a famous Chinese proverb of how adversity reveals virtue. “It’s high time that Baidu stepped forward as a platform company.”
Li said the Beijing-based search engine operator had surpassed 100 billion yuan (US$14.6 billion) in revenue last year. Analysts following the company had estimated annual sales of 101.45 billion yuan, or an increase of about 20 per cent from 2017.
Talk of “winter” has been increasing in Chinese business circles of late as the world’s second economy experiences its slowest growth in decades. The slowdown is being exacerbated by a trade war with the US, with reports of hiring freezes and job cuts in the tech industry.
The Nadaq-listed company, which started investing in AI more than seven years ago, has been hand-picked to spearhead such national research efforts along with four peers and has stepped up its efforts to incorporate the technology into cars, homes and enterprises.
For a while, prospects for a return of Google to China with a censored search engine threatened the near stranglehold that Baidu has had on search advertising in the world’s biggest internet market. Google has since backed off the project after a near revolt by employees.
The US is contemplating national security restrictions on artificial intelligence as part of a broader competition with China on cutting-edge technologies that could power future engines of growth.