Baidu bucks the capital winter to play catch-up to Alibaba, Tencent in outside investments

Baidu, operator of China’s largest search engine and a major player in artificial intelligence (AI), more than doubled its number of outside investments last year, bucking a trend that saw a winter chill descend on the venture capital market in the fourth quarter.

The Nasdaq-listed company made a total of 92 investments in 2018, compared to 41 the previous year, according to a company source familiar with the matter. Baidu did not immediately respond to an emailed inquiry for comment.

Baidu’s growth rate in deals was also the fastest among the so-called BAT tech trio of Baidu, Alibaba Group Holding and Tencent Holdings, according to separate statistics from Beijing-based data firm ITjuzi. With 13 unique AI investments in 2018, Baidu Ventures was also listed as the most active corporate venture capital investor in the space, ­according to a separate report by CB Insights.

“While Tencent and Alibaba are established in other sectors as corporate venture capital firms, Baidu’s chance might only lie in AI investment,” said Wang Hui, a Beijing-based private equity ­investor.

Investing in AI start-ups is also in line with Baidu’s own business strategy, Wang added.

Rhetoric about a “capital winter” has grown since the fourth quarter of last year amid comments by some of China’s most high-profile venture capitalists on the difficulty of raising new funding. As growth in the economy slows, start-ups are coping with lay-offs and employees are under pressure to put in longer working hours.