In a race between America's Waymo and China's Baidu for supremacy in autonomous vehicles, who would you bet on?
My money is on Baidu, the dark horse.
Known in the West as the Google of China, Baidu is fast transforming itself from an Internet search engine into a world-class artificial intelligence company. And autonomous driving is one of its top priorities.
Last month, I listened to Baidu President Ya-Qin Zhang outline his strategy at Baidu's new office in Sunnyvale, Calif. That's right, Baidu operates two r&d facilities in Silicon Valley, just a few miles down the road from Google.
At the evening gathering, Zhang updated 150 software engineers and investors on Apollo, Baidu's open-source platform project for autonomous vehicles. His strategy was compelling:
Invest 9.8 billion yuan ($1.5 billion) in 100 of the world's most promising tech startups.
Hire 200 world-class software engineers in Silicon Valley.
Secure regulatory support from the mandarins of Beijing.
Target China's massive auto market.
Wait, I can hear the cries already: "Baidu will win? This guy cannot be serious."
Critics might argue that Waymo is bound to triumph because it holds a commanding lead in the race to develop self-driving cars, has relationships with tech powerhouses like Intel and can easily acquire key startups with its fistfuls of cash.
These are valid arguments, but Baidu has one big advantage: It has achieved utter dominance in China, the world's largest auto market.
This edge takes on even greater significance when we remember that Waymo and its corporate parent, Google, are unwelcome in China. Google lost its license to operate there in 2010 when it refused to accept Chinese censorship.
In China, Google is on the outside looking in at a time when Beijing is making it harder than ever for American tech companies to gain access. In a market that generates annual sales of 30 million vehicles, that is a huge problem for Waymo.
Here is another reality: By 2025, the government wants half of new vehicles sold in China to be equipped with advanced autonomous technology.
Chinese leaders like to anoint and protect industry champions like Baidu to dominate key tech sectors.
Baidu will not waste any time exploiting its home-field advantage. The company says it will put self-driving King Long buses on Chinese roads next July.
And Baidu has formed a partnership with Beijing Auto to produce 1 million Level 3 self-driving cars — that is, vehicles that can pilot themselves on the highway — by 2019. By 2021, the two companies plan to introduce Level 4 vehicles, which would navigate themselves on highways or local roads.
How will Baidu get to Level 4 so quickly? That's where the open-source Apollo project comes in.
"We see an opportunity to be the Android of the autonomous vehicle industry," Zhang told me at the event.
Before joining Baidu, Zhang was a senior executive at Microsoft. He recalls urging company leadership to pioneer an open-source strategy for smartphones. But then he watched in dismay when Android beat Microsoft to market.
Zhang sees autonomous cars as a fresh opportunity, and he does not want to miss it.
Baidu already has attracted 70 partners to the Apollo initiative, including Nvidia, Microsoft, Ford, Daimler, Intel and Delphi.
"As we develop a complete range of autonomous vehicle technologies, Baidu is a very important partner of ours, especially for the China market," said Danny Shapiro, Nvidia's senior director for automotive.
By partnering with other companies, Baidu can secure access to vast quantities of real-world driving data. This data will be fed into Baidu's algorithms to make rapid improvements in autonomous driving.
Are there glitches in the Apollo strategy? You bet. An open-source approach is vulnerable to cybersecurity lapses. And then there's the question of legal liability when something goes wrong.
But these problems are not insurmountable. Each alliance partner will be responsible for its own Apollo-based driving system, according to Baidu executives.
In the meantime, Baidu will continue to soak up a treasure trove of real-world driving data from its partners. The company's winning recipe is to invest in r&d in California, then use that knowledge to reap sales and profits in China.
You can bank on it.