Baidu (BIDU) & BlackBerry Collaborate On Self Driving Cars

Shares of Baidu Inc. (NASDAQ:BIDU) were up 1.3%, while BlackBerry Limited (NYSE:BB) gained more than 12% yesterday after the two tech giants announced their partnership to help drive the autonomous vehicle revolution.

The partnership is aimed at speeding up the deployment of connected and autonomous vehicle technology for automotive OEMs and suppliers across the world.

Per the agreement, BlackBerry’s safety operating system, QNX Hypervisor 2.0 software, will become the foundation for Baidu's autonomous driving open platform, Apollo.

Baidu’s Apollo platform focuses on utilizing the Chinese tech heavyweight’s strengths in artificial intelligence to build a collaborative driverless car ecosystem. As of now, Apollo has already attracted more than 70 global partners, including OEMs, Tier 1 suppliers, developer platforms and technology startups.

Additionally, the companies will also combine Baidu's smartphone integration software for connected cars and its conversation-based AI system, DuerOS to run on the BlackBerry QNX Platform. DuerOS aims at helping developers in creating voice-enabled devices that can hear, understand and follow commands given by the user.

Notably, shares of Baidu have gained 42.8% in the 12-month period, outperforming the industry’s 26.3% rally.

Partnerships Plays a Key Role

The self-driving/autonomous car conversation is fast gaining momentum with a large number of players ranging from tech behemoths to automakers to components manufacturing firms racing to get an edge over their rivals.

In doing so, they have realized that the path is not without its share of potholes. Thus, a number of them are entering into partnerships, which will help in combining competencies of technology companies and traditional auto suppliers.

Only last month, Baidu entered into a partnership with NXP Semiconductors (NASDAQ:NXPI) in order to grow and advance its self-driving car technology, Apollo. In July, Baidu had announced that more than 50 companies, including big names from the auto and tech industries, have joined its Apollo self-driving car platform. Those companies include Ford, Daimler, Nvidia (NASDAQ:NVDA) , Intel (NASDAQ:INTC), Microsoft (NASDAQ:MSFT), and popular LIDAR-supplier Velodyne.

The recent deal is a win-win situation for both the companies. The collaboration will help the companies to develop new technologies and strengthen their capabilities in the autonomous vehicle market.

Wrapping Up

Undoubtedly the autonomous driving space will witness more innovation over the next few years, both by technology companies and automakers, including smaller startups. In fact, CB Insights estimates that financing in the auto tech startup sector exceeded $1 billion in 2016 and more investment for sure will follow. This is one of the best places to be in because the technology is being developed. Also, early investors can sell their interest at a hefty premium.

It’s not surprising that Baidu wants to make a bigger splash in the self-driving space and turn Apollo into a global initiative. The latest deal for sure will speed up its efforts in this space.

Baidu, Inc. Price and Consensus

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Zacks Rank

Baidu carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.

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