Baidu Inc. is creating a new mobile AI ecosystem with three of China's largest smartphone vendors, a direct challenge to the current app-based model that could embed its technology across millions of devices.
The company announced its "Nebula Project" at the Baidu Alliance Conference on Wednesday, opening its Baidu Orion AI Engine to all partners. "Revenue generated from the Model Context Protocol (MCP) services will be shared with developers," the company said in a statement, signaling a new monetization strategy beyond traditional search.
The Orion AI Engine is a full-chain AI search service solution powered by the company's ERNIE Assistant. It uses a Master Agent to orchestrate various skills, allowing access to Baidu's core search as well as integrated services in e-commerce, travel, and healthcare. Smartphone giants Xiaomi Corp., Honor, and vivo have already joined as the first partners, committing to integrating the engine into their devices. Baidu did not disclose specific performance benchmarks for the Orion engine.
This partnership provides Baidu a powerful new distribution channel, embedding its services directly into the operating systems of major hardware players and potentially bypassing traditional app stores. For Xiaomi and its peers, it offers a way to quickly upgrade their devices with sophisticated AI features. The move could reshape how users interact with services on their phones, shifting from individual apps to integrated, AI-driven assistants. While Baidu's stock fell 2.8% in Hong Kong, the strategic importance of securing these hardware partnerships suggests a long-term bullish outlook for its AI division.
This article is for informational purposes only and does not constitute investment advice.