Baidu World 2025 and China’s Systems-First AI Strategy
How optimization engines, domestic chips and robotaxis reveal a new theory of AI progress built around real-world infrastructure.
Baidu’s annual conference rarely shapes the global conversation about artificial intelligence. The company is often described in the West as a legacy search giant that faded after missing the mobile shift. This year’s Baidu World deserves a different reading. The event offered the clearest view so far of how China intends to develop AI in the next decade. The strategy relies on system engineering, large-scale deployment and deep integration into real-world infrastructure.
The Western AI narrative has been dominated by frontier models, rapid scaling of compute and the race to reach artificial general intelligence. China is pursuing a different path shaped by the country’s industrial structure, regulatory environment and enormous public-sector demand. Baidu World 2025 revealed the coherence of this approach as well as its unresolved questions. Investors outside China rarely see this part of the picture.
What follows is an attempt to explain that second trajectory. The focus is less on Baidu as a company and more on what its strategy reveals about China’s AI market.
China’s AI Priorities Start with Systems
China’s largest AI buyers sit in government, infrastructure, transportation, energy, logistics and state-linked enterprises. These institutions manage dense physical systems that operate under strict safety, reliability and locality requirements. Their expectations for AI differ from those of American consumer platforms or Silicon Valley startups. Improvements in efficiency, scheduling, routing or risk modeling matter more than conversational fluency.
This environment rewards companies that can integrate software, hardware and domain expertise into a single operational system. It also rewards long project cycles, steady deployment and local compliance. China’s AI demand is shaped by traffic grids, power systems, financial regulation, labor shortages, and the need to operate at population-scale. In such a world, the highest value does not necessarily sit in one ultra-capable model. It sits in the ability to orchestrate multiple components inside complex physical networks.
Baidu has aligned itself with this logic more firmly than any other major Chinese technology company.
China’s AI strategy becomes clearer only when you examine what sits inside the loop: the optimization engines, compute islands and autonomy systems that actually run physical infrastructure.
The following section breaks down how Baidu is building these systems — and why this matters more than frontier model benchmarks.