news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Author: Xue Xingxing

Editor: Jiang Jiao

Cover｜Silicon Valley

On July 7, Baidu held a directors' meeting. This communication meeting is called "fireside chat" within Baidu. It is held every quarter and is attended by Robin Li and Baidu's internal directors and above. It is not open to grassroots employees. Baidu released the minutes of the directors' meeting internally on July 12.

A document exclusively obtained by "The Mountain" shows that in addition to Li Yanhong's old talk about AI strategic issues such as closed-source large models are better and intelligent agents are the direction of artificial intelligence application, he also rarely responded to the governance challenges currently facing Baidu at this meeting, including low morale within the company, senior executives' irresponsibility, and difficulties in cross-departmental collaboration.

Two months ago, Qu Jing, Baidu's head of public relations, resigned due to several controversial short videos, which triggered doubts about Baidu's culture inside and outside the company. This fireside chat was the first held after Qu Jing's resignation. The talk was held by Liang Zhixiang, Qu Jing's former boss and the current senior vice president who took over Baidu's public relations business, and Robin Li.

Li Yanhong did not mention Qu Jing at the meeting. In response to a question about what makes an excellent mid-level or senior manager, he said that managers must have leadership and set an example for their employees. "Many times, culture is not something that can be put on paper, spoken or written, but it is about how you solve problems when they occur."

He said that managers who don't understand the business and can't make decisions shouldn't be in this position. At Baidu's advanced employee awards ceremony in early May, Robin Li said that he is a boss with a relatively good temper and rarely loses his temper with employees, but he also has a bottom line that cannot be touched.

Li Yanhong's latest quarterly OKR O4 mentioned the timely matching of organization and strategy, KR1 mentioned learning AI native thinking and further focusing on the company's strategic direction, and KR2 mentioned timely summarizing lessons learned and doing a good job of cross-organizational communication alignment. Li Yanhong's explanation of OKR did not involve the Qu Jing incident, and he said that all these OKRs were set based on the AI ​​direction.

01｜"This time it will be different"

In the first half of 2023, relying on the momentum of the big model, Baidu's stock price continued to rise, soaring to HK$154.4 in March of that year, reaching its highest point since the beginning of 2022. But it has been declining since then and has been spit out in full. Even though it has recently risen due to the rapid growth of Carrot Run, setting the highest single-day increase in the past year, it has not returned to last year's high. In the past year, Baidu's Hong Kong stock price has fallen by 37%.

Some market analysts believe that Baidu's current AI strategy has not yet significantly boosted its main business. Online advertising remains the mainstay of Baidu's revenue, but the growth rate of this business has slowed down for several consecutive quarters, and there is still no sign of recovery in the second quarter. Li Yanhong said in the first quarter earnings call that Baidu began to commercialize generative AI for advertising in the second half of last year, and currently it can bring millions of yuan in incremental revenue to the advertising business every quarter.

At the internal director meeting, Robin Li also admitted that Baidu's growth rate has slowed down, "it's a difficult time." He hopes that employees will not care about the outside world's views, but just make achievements, and other things will come naturally. "If you believe in this, stay and we will do it together. If you don't believe in this, there are better options out there, that's it."

Li Yanhong said that the current state of mobile Internet has become a zero-sum game, and Baidu is in a passive position. "The content ecology is still far behind that of Douyin and WeChat. If we want to catch up completely according to the mobile Internet strategy, it is not so easy."

He said that Baidu's morale is indeed not good at the moment, because Baidu is in the process of transformation. Several technological breakthroughs in the past have made them mistakenly believe that the era of AI has finally arrived, but "the best endings are always disappointing." He believes that "this time will be different." It's just that how long it will take to usher in the real era of artificial intelligence still needs to be waited.

Li Yanhong thinks that the anxiety and sense of urgency currently felt by employees are normal. He also cited the example of Ideal MEGA, "We can see that these people or these companies have a stronger sense of anxiety than us." Li Xiang gave a speech in the company corridor in 2022, saying that they have been targeted by the most wolfish company in the world. But even so, there will still be situations like MEGA that cannot be sold, so there must be a sense of urgency.

The solution he gave was "focus." Li Yanhong said Baidu cannot fight too many battles because the company's resources are limited. They need to put resources into areas that are truly related to the core business to avoid excessive dispersion of resources, which would result in losing battles that should have been won.

A former Baidu IT employee told The Mountain that Baidu used to be a company that was particularly willing to start new businesses, "because it didn't have any particularly outstanding businesses. To put it bluntly, if I did a project independently, the project would succeed, but basically it didn't."

Over the past decade, Baidu has tried many cross-border businesses besides AI and search, including food delivery, group buying, e-commerce, live broadcasting, short videos, etc. Before returning to Hong Kong for listing, it had planned to spend $3.6 billion to acquire YY to make up for the shortcomings of its mobile ecosystem. This acquisition, which was the largest in Baidu's history, was terminated after being delayed for several years.

Before the big model, its most recently abandoned strategic direction was the Metaverse. In 2020, Baidu released the first Metaverse product in China, "Xirang", and even held the Baidu AI Developer Conference the following year in Xirang. But Xirang performed poorly, and the graphics were even worse than mobile games a few years ago. Last year, Xirang's head, Ma Jie, announced his resignation, which was seen by the outside world as a sign that Baidu had given up on the Metaverse.

Baidu XiRang

"Entrepreneurial projects came one after another, but they were all useless. Basically, they all failed and eventually fell through," said the former Baidu IT employee.

Li Yanhong thinks that it is normal that they cannot win many battles, because many of the things they do are things that have never been done before. They go to war without any way to prove whether this road is feasible or not. "After fighting for three to five years, we may find that this road is not feasible. This situation is not uncommon, and I also accept it, because no one in the world has walked this road before." They are at the forefront, so they must admit this law. They must achieve nine defeats and one win.

02｜Management must have leadership and set an example for employees below them

Baidu's core value is "simple and reliable". It has been used for more than 20 years, but it still seems that it has not deeply imprinted the organizational culture on every employee like Alibaba. A Baidu employee told "The Mountain" that he did not understand these words. Another former employee said that internal employees even had a joke about it, "simple, reliable".

The Qu Jing incident in May further intensified doubts about the company's values ​​both inside and outside the company. In early May this year, Qu Jing, Baidu's public relations director, posted several controversial videos on short video platforms, which attracted public attention. Qu Jing later apologized on her personal social account and resigned soon after.

Cui Shanshan, senior vice president of Baidu, said at the company's internal award ceremony for outstanding employees that the company has been around for nearly 25 years, and it is not surprising that problems have occurred. It is wrong not to be able to look at them soberly and rationally. She said, "At Baidu, nothing is more worthy of upholding and defending than simple and reliable values." Robin Li also said at the event that these outstanding employees who were honored are the truest representatives of Baidu.

Robin Li at Baidu's internal awards ceremony/Photo source: Baidu

Several employees interviewed by The Mountain mentioned the management problems within Baidu, such as the inaction of middle-level leaders, mutual buck-passing, and only following their superiors, "I will do whatever the superiors want me to do."

One of the questions at the directors' meeting was about what is the standard of excellence for Baidu's middle and senior management. "There are many high-level Ts, high-level Ps, and even M4s and M5s in the company who are 'in the temple but do not know the world'. They do not take responsibility at key decision points and require the business departments to do a lot of internal popular science work, which is inefficient, has long processes, and slow decision-making. Robin also said at the Baidu Pride Awards Ceremony that these excellent employees represent Baidu's cultural values. So, for middle and senior management, what is the standard of excellence?"

Li Yanhong replied that the company has a history of more than 20 years, and some of those directors or M4, M5, including T10, P10 and above, have gradually become less involved in the work and somewhat out of touch with the actual work. He said that he has requirements for HR, and that cadres should be evaluated. If the cadre is not knowledgeable, cannot make decisions, and cannot make decisions, he should not be in this position. For the executives, their requirement is "whoever benefits should promote it, and if it cannot be solved, escalate (step by step)."

"Whether you are a cadre or an employee, everyone must understand that everything will have a conclusion and a solution. In the end, if no one can solve it, it will come to me, and I will definitely give you an answer and a decision. It is impossible for anything to be dragged on without a conclusion. Therefore, don't let this matter delay our decision-making and execution," said Robin Li.

Li Yanhong said that in addition to the requirement of "simple and reliable", he also requires managers to have leadership. "The employees below you look up to you, so you have to set an example for them." He called out to the middle and upper-level employees above the director level of Baidu who attended the meeting, "As a director of Baidu, you must be able to set such an example, so that more people can feel that this is a good company full of positive energy, competitiveness and prospects."

"Baidu used to be a bit like a state-owned enterprise," the Baidu IT employee told The Mountain, but now Baidu has begun to reduce costs and increase efficiency, and strictly enforce attendance. A Baidu employee said that the company's clock-in time is recorded, and people go to work at 9 a.m., but basically they leave at 8 or 9 a.m.

A former Baidu employee who was laid off some time ago said that he didn't know at first whether he was laid off by HR or department leaders. Later, several laid-off employees privately analyzed that it was AI's intention to "calculate your off-get off work time, your code submission volume, and your overall cost-effectiveness."

Layoffs are ongoing. According to Baidu's annual report, Baidu will have 39,800 employees at the end of 2023 and 41,300 at the end of 2022, a reduction of 1,500 people in one year. However, this number is still smaller than the number of layoffs at Alibaba and Tencent.

The above-mentioned former Baidu IT employee said that in the past few years, Baidu's R&D positions at T6 and T7 could be directly transferred to management and start working at the M level. The M level has high salaries and is easy to move to, so no one writes code. But in the current context of reducing costs and increasing efficiency, "they have started to cut these management levels, especially those who don't write code." In the past, Baidu employees had a general salary increase of about 6% per year, but now it has been cancelled.

03｜If you don’t speak up, you will be led astray

The past period of time may be the most intensive period for Li Yanhong to speak out. He constantly talked about AI strategy, which caused a lot of controversy, such as "closed source large models are definitely better than open source". Recently, he put forward the view that intelligent agents are a promising direction for AI applications, and search is the largest entrance for the distribution of intelligent agents.

Li Yanhong said that he was the first guest speaker at the industry forum of the Shanghai Artificial Intelligence Conference. Before speaking, he anticipated that many of his statements would cause controversy. However, the current artificial intelligence market is chaotic. "People from all walks of life are expressing various opinions on AI. If we don't speak out at this time, we will be led astray by others." Therefore, he has to continue to output to the outside world, trying to influence the outside world's understanding of the current development status of AI and its future development direction.

Robin Li at the Creat 2024 Baidu AI Developer Conference/Photo source: Baidu

In the past year, almost all of Baidu's businesses have been connected to AI. At the Baidu World Conference in October last year, Robin Li announced that all of Baidu's applications, including Baidu Search, Baidu Library, Baidu Cloud, etc., were rebuilt with AI.

The former Baidu IT employee said that the current employee promotion and business emphasis will be considered in terms of their relationship with AI. Some business lines that were originally far from AI have to think about how to integrate AI. "When it comes to promotion, whoever is related to AI will be promoted faster, it's that simple."

At this directors' meeting, Robin Li reiterated his views on AI strategy. In addition to what he had previously mentioned, that closed source is better than open source, and that intelligent agents and large models have broader prospects for ToB than ToC, he also talked about multimodality, Apple Intelligence, and large model price wars.

Multimodality is the right direction, EB5 will be compatible with multimodality

"I think GPT-4o is the right direction. Before that, everyone has been looking forward to the release of GPT-5. But we saw that after the release of GPT-4, GPT-4V, GPT-4Turbo, and GPT-4o were released. These are all various attempts based on GPT-4. The direction of 4o is multi-modal. Multi-modal has faster response speed, more natural connection, and is more native. It can process various pictures, sounds, texts, etc. in one model, which can provide better user experience and can be used in more fields. I still agree with the development direction of 4o."

Li Yanhong said that they have heard some voices on multiple business needs. No matter whether they launch EB5 or any new model in the future, they will eventually be compatible with multi-modality.

Apple Intelligence has little to do with Baidu

Apple Intelligence has little to do with Baidu. It mainly emphasizes the big model on the end, but Baidu has almost no control over the end. Xiaomi, OPPO and Vivo in China and iPhone abroad are all very strong in channel management. They may think that the end model is an opportunity, or at least something that cannot be missed. To be honest, I don’t care so much about what they will achieve in the end. It doesn’t have much to do with us.

Robin Li believes that these companies may be relatively poor in real cloud models, and it is likely that they will rely on one or more large cloud models in the future. Baidu also hopes to provide them with cloud model capabilities.

"As for what innovations the edge model will have in the future, I am not that concerned and have not thought about it too much. If it simply copies the capabilities of the cloud model, then there is nothing new about it. It is just smaller and has worse capabilities. At most, people may think that this has better privacy protection and the data is not transmitted to the cloud, that's all."

Baidu does not compete in price wars, but in the end competes in efficiency

Li Yanhong said that the current large model market is quite chaotic, and people have not yet reached a strong consensus on which model is the best, which model has the highest cost-effectiveness, whether to use public cloud or private deployment, etc. They need to run forward for a while, and in the end, the competition is not about price, but efficiency.

"Whoever is the most efficient, whoever can minimize the cost while achieving the same effect, or whoever can achieve the best effect at the same cost, will win in future competition."