Baidu Inc (ADR) (NASDAQ:BIDU) To Invest $3 Billion In Internet Startups

Baidu Inc (ADR) (NASDAQ:BIDU) has set aside an investment capital worth $3 billion to be invested in the internet sector.

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The investment fund will be known as Baidu capital and will be used to invest in internet related startups that will help the company remain relevant in the future. The company announced on its website that the fund will be split into funding amounts that range between $50 million and $100 million to be used as individual funding. The idea is to use the fund to leverage new technologies that will strengthen the company’s future.

Baidu is currently the dominant search engine in China but maintaining that lead is becoming an increasingly daunting task due to fierce competition. Some rival firms include Alibaba Group Holding Ltd (NYSE:BABA) and Tencent Holdings Ltd (OTCMKTS:TCTZF). Baidu is also looking to venture into augmented reality, virtual reality and artificial intelligence so that it can stay afloat in the technology sector. A month ago, the company unveiled a $200 million fund that will invest in the three sectors.

Baidu Capital will be funded by various sources that include government-supported investment institutions, insurance funds, and securities firms. China has been experiencing an economic slowdown but that has not been a challenge to startups. This is because startup funding has been a concept that is becoming more accepted and has recently been booming.

Roughly $37 billion was invested in startups in the first half of this year marking a record high in startup investment which doubled the investment in 2015. The company is yet to reveal which startups will benefit from the investments but those are details that will be released later once the deployment process begins. It will also not be the first time that Baidu is investing in startups. The company has previously invested in firms such as ZestFinance and a finance firm known as Circle.

Baidu stock closed the latest trading session at $175.41.

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