Baidu's Uber Deal: Will It Revive the Stock?

Baidu's stock surged 9% after announcing a multi-year partnership with Uber, deploying thousands of autonomous vehicles on Uber's platform outside China and the US. The deal could make Baidu a credible player in the global autonomous taxi narrative, but it remains to be seen if it will breathe new life into the stock, which has traded sideways over the past year amid challenges in its core search business.

Baidu, Inc. (NASDAQ: BIDU and HKEX: 9888) and Uber Technologies, Inc. (NYSE: UBER) have announced a multi-year strategic partnership to deploy thousands of Baidu's Apollo Go autonomous vehicles (AVs) on the Uber platform across multiple global markets outside the U.S. and mainland China. This collaboration aims to increase the supply of affordable and reliable ridesharing options by leveraging Baidu's advanced autonomous vehicles and Uber's extensive network.

The first deployments are expected in Asia and the Middle East later this year. If a rider requests a qualifying Uber trip, they may be presented with the option to have their trip fulfilled by a fully driverless Apollo Go autonomous vehicle. Apollo Go, which currently operates a fleet of over 1,000 fully driverless vehicles globally with its global footprint spanning 15 cities, including Dubai and Abu Dhabi, is gaining strong momentum and accelerating its global expansion [1].

Baidu's Apollo Go has completed over 11 million rides as of May, making it the largest fleet of driverless vehicles globally, surpassing Waymo (GOOGL) which had completed 10 million rides by late May [1]. The partnership underscores Baidu's leadership in autonomous technology and its ability to scale its services beyond its domestic market.

Baidu's co-founder, chairman, and CEO, Robin Li, stated, "We are committed to bringing the benefit of autonomous driving technology to more people in more markets, and this partnership with Uber represents a major milestone in deploying our technology on a global scale." Uber's CEO, Dara Khosrowshahi, added, "This partnership brings together two of the world's most iconic technology companies to help shape the future of mobility. As the world's largest platform of its kind, spanning mobility, delivery, and freight, Uber is uniquely positioned to help AV leaders like Baidu bring their autonomous technology to the world."

The news of the partnership has been well-received by investors. Uber stock has gained 56% so far this year, significantly outperforming the S&P 500, while Baidu shares rose nearly 5% in premarket trading following the announcement [2]. This partnership is a testament to the growing importance of autonomous vehicles in the ride-hailing industry and the increasing competition among tech companies to deploy self-driving taxis at a commercial scale.

The partnership will initially focus on Asia and the Middle East, where urbanization challenges and labor shortages create ripe conditions for driverless taxis. By integrating Apollo Go into its platform, Uber can offer riders cost-effective, on-demand autonomous rides—without the need to build its own AV tech.

Baidu's Apollo Go service, already operating over 1,100 fully driverless vehicles in 15 cities, has delivered 11 million rides to the public since its launch. Its sixth-generation RT6 robotaxi, priced under $30,000, offers a breakthrough in cost efficiency, with a battery-swapping system reducing hardware depreciation. This affordability, paired with a proven safety record (130 million autonomous kilometers driven), positions Baidu as a leader in scalable autonomous mobility [3].

Uber, with its global network of 15,000 cities, will provide Baidu with unparalleled reach to deploy its AVs in underserved markets. The partnership's first-mover advantage is critical, as it allows Baidu and Uber to focus on markets with fewer geopolitical and technical barriers.

Baidu's stock surged 9% after the announcement, signaling investor optimism about the potential of this strategic alliance. However, it remains to be seen if this partnership will breathe new life into Baidu's stock, which has traded sideways over the past year amid challenges in its core search business.

References:
[1] https://www.prnewswire.com/news-releases/baidu-and-uber-join-forces-to-accelerate-autonomous-vehicle-deployment-302505303.html
[2] https://www.ainvest.com/news/baidu-uber-partnership-highlights-company-autonomous-technology-leadership-2507/
[3] https://www.foxbusiness.com/fox-news-world/uber-partners-chinese-tech-giant-roll-driverless-vehicles-multiple-global-markets