In a significant development, Japanese automakers Toyota Motor Corp (NYSE:TM) and Nissan Motor Co (OTC:NSANY) have teamed up with Chinese tech behemoths Tencent Holdings Ltd (OTC:TCEHY) and Baidu Inc (NASDAQ:BIDU) respectively. The goal of these partnerships is to enhance their artificial intelligence (AI) capabilities in China.
What Happened: Toyota plans to incorporate Tencent’s technology into a passenger vehicle manufactured in China, set to be launched this year, CNBC reported on Thursday. The alliance aims to capitalize on Tencent’s expertise in big data, AI, and cloud computing, according to Yiming Xu, a director for brand and communications for Toyota in China.
In a parallel move, Nissan and Baidu have inked a memorandum of understanding to research AI and “smart cars.” Nissan intends to utilize Baidu’s generative AI on its platform to investigate potential tech development opportunities. The automaker also plans to outfit its Chinese vehicles with Baidu’s AI products.
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Why It Matters: These partnerships highlight the critical role of AI for automakers and the competitive dynamics of China’s automotive market. Japanese auto manufacturers, once leaders in China, have been contending with technological changes that have upset their market standings. The alliances with Tencent and Baidu represent strategic efforts to regain traction and maintain relevance in the face of rising domestic brands, the transition to electric vehicles, and an ongoing price war.
In 2023, Toyota turned to AI to expedite the development of its electric vehicles. Similarly, in March, Nissan partnered with Honda to enhance electric car technology.
The recent partnership with Baidu, which surpassed 200 million users with its AI chatbot Ernie Bot in April 2024, is a testament to Nissan’s commitment to AI and smart car technology.
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