Chinese tech giant Baidu, Inc.’s (HK:9888) Ernie bot will power up Samsung Electronics’ (DE:SSU) latest artificial intelligence (AI)-enabled smartphones. The phone maker will use Baidu’s Ernie chatbot to offer AI capabilities in its latest Galaxy S24 series in China. The news comes as a surprise as most of Samsung’s smartphones in other countries leverage Alphabet-owned (NASDAQ:GOOGL) Google’s technology.
Baidu shares were up 2% today, but have declined nearly 23% in the past year.
Details About Baidu-Samsung Collaboration
Both companies broke the news and emphasized that Ernie will enable translations, text summarisations, and other productivity features in the Galaxy S24 devices. In one of the advertisements, the Galaxy S24 showcases Samsung’s “circle to search” feature, which helps users simply circle the objects they like and search for similar ones on the web. Baidu will also provide the backend support for this unique feature, while Google will provide the same in other countries. Samsung’s drastic shift seems to be triggered by Google’s limited exposure in China and the increasing geopolitical tensions between the Chinese and U.S. governments.
Google’s Gemini and Baidu’s Ernie are vying for a larger share in the highly lucrative generative AI market. These tools are based on large language models (LLMs) and trained with tons of data scrapped from the net. Baidu has claimed that its Ernie 4.0 is superior to Google’s new GPT-4 tech in several areas, including language understanding and output generation.
Meanwhile, Samsung faces stiff competition in the smartphone market, which is dominated by rival Apple’s (NASDAQ:AAPL) iPhone and Chinese players Vivo and Oppo. Samsung’s plan to use a domestic player’s chatbot to enable AI features might be aimed at attracting more Chinese customers. This would solve the dual purpose of easy tech availability from local manufacturers and growing market share in the world’s largest smartphone market.
Is Baidu Stock a Good Buy Now?
With three unanimous Buys, 9888 stock commands a Strong Buy consensus rating on TipRanks. The Baidu Inc. share price forecast of HK$179 implies 73.6% upside potential from current levels.
