Li Yanhong Leads the Charge: How Baidu is Transforming Short Video Business with AI Innovations

Baidu Invests in AI Short Drama Company

Baidu is making waves in the AI sector with a strategic investment in CreativeFitting (Jingying Technology). The company recently announced it has secured several million dollars in Pre-A+ round funding from Baidu, reinforcing the tech giant's commitment to advancing AI native applications.

Why Did Baidu Choose CreativeFitting?

Founded in 2021, CreativeFitting specializes in self-developed AIGC (Artificial Intelligence Generated Content) video generation models. The company's recent launch of Reel.AI marks the debut of the world’s first AI short drama app, which quickly topped international entertainment bestseller lists.

Baidu's investment signifies strong confidence in CreativeFitting, which has previously attracted three rounds of funding. Notably, in 2021, the company raised millions in its seed round supported by Zhen Fund, followed by a substantial seed+ round in 2022 from Zizhuxiaomiao Fund, and most recently, millions in their Pre-A round from investors including Matrix Partners and Zhonglin Capital.

This investment reflects Baidu's increased interest in the short drama sector. In October 2021, Baidu initiated the “Breaking Shell Project,” committing substantial financial resources to cultivate high-quality content and enhance promotional efforts in micro-drama production.

The Rise of AI Short Dramas

The trend of AI short dramas is rapidly growing, especially in international markets, amid a competitive Chinese landscape with over 4,000 registered micro-dramas as of November 2023. Some companies are seeking expansion abroad, leveraging AI for translation and subtitling to streamline the adaptation of Chinese dramas for foreign platforms.

Innovative strategies, like AI-generated voiceovers synchronized with character lip movements and the use of deepfake technology to replace Chinese actors with Western ones, aim to appeal to global audiences' tastes.

According to data from Sensor Tower, the overseas short drama market has seen significant growth, with in-app purchase revenue and downloads increasing by 280% and 220%, respectively, from September 2023 to February 2024. However, successful international adaptations require more than just translation; they demand cultural insights and comprehensive localization.

Baidu's AI Monetization Strategy

Baidu’s financial report from February 2023 revealed total revenue of 134.6 billion yuan, a 9% year-on-year growth, alongside a notable net profit of 28.7 billion yuan, reflecting a remarkable 39% increase. However, despite these promising figures, Baidu's stock prices fell post-earnings announcement.

Baidu's AI integration spans multiple sectors, including e-commerce, where digital influencers during shopping festivals have driven record sales. As of December 2023, their AI model, Wenxin Yiyan, reached over 100 million users, boasting a daily usage rate exceeding 50 million requests.

Baidu's founder, Robin Li, has underscored the ongoing “creativity revolution” driven by AI, reiterating the company's commitment to investing in generative AI and foundational models.

In summary, while Baidu has achieved significant advancements in AI technology, the competitive landscape requires continual innovation and adaptation. As AI-driven creativity progresses, Baidu is poised to leverage its potential while addressing the challenges of industry competition and evolving audience expectations.