Operator: Thank you. Your next question comes from Wei Xiong with UBS. Please ask your question.
Wei Xiong: Hi. Good evening, management. Congratulations on a strong quarter and thank you for taking my question. I want to ask about your robotaxi business. I’m wondering. What is the current unit economics for this business? And how should we think about the breakeven time line for the robotaxi? And also if management can share any color on your technology road map, that would be appreciated as well?
Zhenyu Li: Thanks for your questions. This is Zhen. For the questions regarding unit economics, as you know, the major cost for robotaxi are labor cost and vehicle costs. So firstly, labor cost. As you know, fully driverless operation means no safety officers in the car, which helps to lower labor costs. In 2022, we made big progress in providing fully driverless service on the open roads. Now we are providing fully driverless ride hailing service in Wuhan and Chongqing. For example, in Wuhan, we kept expanding operations by covering a wide area and longer daily operations — operating hours and also by growing our fleet of vehicles. In December, we were allowed to test drive fully driverless cars on the open roads in Beijing.
This is important step towards fully driverless operation in the capital city. In 2023, we plan to further expand our fleet and drive for fully driverless operations. We will continue to reduce labor costs by allowing more vehicles to remove in-car safety operator. More and more cities in China are supportive to autonomous ride hailing operation. As a market leader, Baidu is benefiting from this change. Also, as we said before, scaling up operation helped us to refine our core technology and further improve our safety performance. As we scale up, we will further improve in our core technology and gaining trust from regulators. Apollo Go remained as the largest autonomous ride hailing service provider globally. Last year, we provided more than 1.5 million rides to the public.
Now, on average, each vehicle in top cities like Beijing provides more than 15 rides a day. This number is already close to what a taxi can do. We believe, by continuously improving our technology, more and more cities will give green lights to our fully driverless ride hailing service in the future. Secondly, reducing vehicle cost with Apollo RT6, which is designed to offer large-scale fully driverless ride-hailing services. We are bringing the cost of robotaxi to the price range of mass-market electric vehicles for the first time. We believe vehicle costs will continue to decline in the future, as China’s EV market is developing very fast and the entire supply chain is highly localized. The cost of auto parts still has a lot of room to decrease.
Combining those two factors, we believe that the unique economics of Apollo Go will continue to improve. As Robin said, once we scale up, we can leverage large language model to improve technology. And this will help us to further improve safety performance. Thank you.
Wei Xiong: Thank you.
Operator: Thank you. Your next question comes from Kenneth Fong with Credit Suisse. Please ask your question.
Kenneth Fong: Hi. Thank you management for taking my questions, and congrats on the very strong set of results. I have a question on user traffic and user time spent. Have you seen any impact or changes in these two parameters as China reopened, especially in the big cities? Thank you.
Robin Li: Hi Kenneth, this is Robin. People started to spend more time outdoors post the reopening, but actually user time spent for our major apps, as a whole, increased 6.6% year-over-year, I think, in January. And that outperformed the overall mobile market. We have a wide variety of apps that cater to various needs of users. Baidu App is one of the very few super apps in China, and Baidu Search has a unique value proposition. We help people quickly find the most relevant and authoritative information online through technology. So whenever users want to search for information and knowledge, they come to Baidu. When they come back to work, this becomes more apparent. Even if they want to check for epidemic development in their regions or check entrance exam scores, this kind of needs can be very better and better matched by the Baidu Search and other Baidu Apps.
Over the past years, we continued to use technology to enrich content and services so we can provide our users with better experiences in search, in feed and in many other products. Today, people not only come to us to search for information but also to find products and services. These efforts have strengthened Baidu’s leading position in China’s mobile Internet space. And another highlight is, of course, Ernie Bot, as I mentioned before. It has the potential to become a new traffic entry point for people online. Also, using AI to generate short video content is a typical application for Generative AI. We believe AIGC will help us accumulate more short videos on our platform over time, and the direct benefit will be increasing video viewership and ad revenue.
Thank you.
Kenneth Fong: Thank you, management. Operator: Your next question comes from Lincoln Kong with Goldman Sachs. Please ask your question.
Lincoln Kong: Thank you, management for the opportunity. I have a follow-up in terms of ChatGPT and our Ernie Bot. So it seems that many domestic company are — recently keep announcing they’re partnering with us or use Baidu’s — the Ernie Bot technology. So can management elaborate a bit more on the format of this partnership? And what could be the monetization opportunity here? And how big or — should we think about this revenue potential? And also in terms of competition: So how should we think about other Internet companies coming offering a similar service or do challenges and limit our monetization opportunity here? Thank you.
Robin Li: Sure. We’re glad to see that, after we announced the plan to launch Ernie Bot, many organizations reached out to us and expressed their strong interest to work with Ernie Bot. Some already announced their plan to partner with us to integrate Ernie Bot capabilities into their products or services or operations. More and more enterprises realize that generative large language models are going to change their industries, and they would like to capture this opportunity. The fact Ernie Bot has attracted so much interest also shows that Baidu is well recognized for our leading AI capabilities and the age of AI has finally come. And regarding to monetization opportunities, Ernie Bot will be integrated into Baidu Search to enhance the user experience.
And users will be much more dependent on us for all kinds of tasks and needs, therefore significantly expand the market size of search. We are using AIGC to expand our content like text, images or videos; and this will create a great opportunity for us to attract new users, increase user time spend and user stickiness; help us gain share in the online ad market over the long run. And for cloud customers, they will be able to leverage our full-stack AI capabilities, not just the basic stuff, storage or bandwidth or database, this kind of things. They can develop their apps based on our AI framework PaddlePaddle and the foundation model Ernie. It will be much easier, much more efficient, much more powerful, so this will propel our cloud revenue too.
And our full stack of AI capabilities is quite unique. It contains cloud infrastructure, deep learning platform like PaddlePaddle and large language models and widely used applications. We have a strong presence in all four layers, and these four layers work together efficiently. Our large language model Ernie 3.0 has been trained with billions of daily user search requests and other popular Baidu family of apps. Baidu’s Ernie Bot will be using this kind of hugely well-tagged data pool to help improve and adapt quickly over time. The barrier to entry for this is very high. It requires multiple years of significant investment, and we have the first-mover advantage. The technology behind Ernie Bot is called, Reinforcement Learning with human feedback.
So here, the human feedback part is critical. As the first mover, we get more-and-more human feedback and further improve our capabilities way ahead of anyone else. And right now we are focused on preparing the launch of Ernie Bot and make continuous improvement after the launch. And we are also focusing on areas that we believe, Ernie Bot will create immediate value, so stay tuned. Thank you.
Lincoln Kong: Thank you.
Operator: Thank you. Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may all disconnect.
