Baidu to fold embattled medical business into AI, search units

By Cate Cadell

SINGAPORE (Reuters) - Chinese search engine giant Baidu Inc will close some of its medical businesses and fold other health segments into its artificial intelligence and search teams, the firm said in a statement sent to Reuters on Thursday.

Baidu has been refocusing its business strategy after Chinese authorities cracked down last year on medical advertising, once a lucrative business sector for the firm, which led to a steep drop in sales in the latter half of 2016.

The firm, China's answer to Alphabet Inc's Google, was at the centre of a national media outcry last year when a student with a fatal cancer blamed Baidu averts for directing him to suspect, ultimately ineffectual treatment.

Regulators responded by slapping curbs on the firm's healthcare advertising business.

Baidu said parts of the medical team would be integrated into the artificial intelligence and search engine teams.

"Other health business units will be shut down and their staff will be offered other roles internally in line with the demands of the company's development," the firm said.

The artificial intelligence teams would look to develop applications that could be used in the medical field. These could include areas such as drug development and testing, gene sequencing and patient diagnosis.

"The most important force that could change the medical field is artificial intelligence", Baidu CEO Robin Li said.

In January, Baidu appointed former Microsoft Corp executive Qi Lu as chief operating officer, part of the broader push into artificial intelligence as a new driver for growth.

(Reporting by Cate Cadell; Writing by Adam Jourdan; Editing by Stephen Coates)