SHANGHAI — Chinese tech company Baidu said Wednesday its Apollo Go robotaxi arm expects to turn profitable next year.

The projection comes as Elon Musk has emphasized his plans to build up Tesla’s robotaxi efforts amid a decline in revenue. 

Baidu is one of the major players in China’s nascent robotaxi market and received permission from a Beijing city district to begin charging fares in November 2021.

While most of the cars still have a human staff worker inside for safety, the same Beijing district officially let Baidu and start-up Pony.ai charge fares for robotaxi rides with no staff in the vehicle in September 2023. 

Apollo Go operated about 839,000 rides in the last three months of 2023, according to Baidu’s latest earnings report. The company is due to release quarterly results Thursday.

About 45% of the orders in the fourth quarter in Wuhan were fully driverless, up from 40% the prior quarter, the company said.

In addition to growing usage and reducing labor costs per ride, Baidu is making the cars cheaper.

Baidu on Wednesday announced Apollo’s 6th generation robotaxi will cost around 200,000 yuan ($28,169) — or less than half that of the prior generation, the company said.

This year, Baidu plans to deploy 1,000 of those 6th generation robotaxis in the city of Wuhan, where the company already operates a number of vehicles without any human staff inside.

“With decreasing costs and increasing orders, Apollo Go’s unit economics (UE) is nearing break-even, expected to achieve balance in the fourth quarter of 2024 and turn profitable by 2025,” Baidu said in a press release.

Rival robotaxi operator Pony.ai is preparing for a listing outside mainland China, according to the China Securities Regulatory Commission website in late April.

Others in the auto industry remain more skeptical about fully driverless cars, which require broad regulatory approval in order to operate.

Xpeng Vice Chairman Brian Gu told reporters last month he didn’t expect robotaxis to be a real business for at least five years.

Alphabet CEO Sundar Pichai said Google will “sort it out” if it determines Microsoft-backed OpenAI relied on YouTube content to train an artificial intelligence model that can generate videos.

The comments, in an interview Tuesday with CNBC’s Deirdre Bosa, come after OpenAI technology chief Mira Murati told the Wall Street Journal in March that she wasn’t sure if YouTube videos were part of the training data for the company’s Sora model introduced earlier in the year.

Murati said OpenAI had drawn on publicly available data and on licensed data. The New York Times later reported that OpenAI had transcribed over a million hours of YouTube videos.

Asked if Google would sue OpenAI if the startup violated the search company’s terms of service, Pichai didn’t offer specifics.

“Look, I think it’s a question for them to answer,” Pichai said. “I don’t have anything to add. We do have clear terms of service. And so, you know, I think normally in these things we engage with companies and make sure they understand our terms of service. And we’ll sort it out.”

Pichai said Google has processes in place to figure out if OpenAI failed to comply with the rules. Newspapers such as The New York Times have already taken aim at OpenAI for allegedly breaking copyright law and training models on their articles.

Pichai’s interview followed a keynote to developers at Google’s I/O conference, where executives announced new AI models, including one called Veo that can compose synthetic videos. Those looking to get early access will have to receive approval from Google.

OpenAI preempted the Google event on Monday. The company revealed an AI model called GPT-4o and showed how users of its ChatGPT mobile app would be able to hold realistic voice conversations, interrupting the AI assistant and having it analyze what appears in front of a smartphone camera. On Tuesday, Google showed off similar upcoming capabilities.

“I don’t think they’ve shipped their demo to their users yet,” Pichai said of OpenAI. “I don’t think it’s available in the product.”

OpenAI said in a blog post on Monday that customers of its ChatGPT Plus subscriptions will be able to try an early version of the new voice mode in the weeks ahead. Pichai said Google’s Project Astra multimedia chat capabilities will come to its Gemini chatbot later this year.

“We have a clear sense of how to approach it, and we’ll get it right,” Pichai said.

Google has reduced the cost of serving up AI models in web searches by 80% since showing off a preview last year, relying on its custom Tensor Processing Units (TPUs) and Nvidia’s popular graphics processing units, he said. Google said during the keynote that it’s starting to display its AI Overviews in search results for all users in the U.S.

In June, Apple will hold its Worldwide Developers Conference in Cupertino, California. Bloomberg reported in March that Apple was discussing the idea of adding Gemini to the iPhone. Pichai told Bosa that Google has enjoyed “a great partnership with Apple over the years.” A Google expert witness said in court last November that the company gives Apple 36% of its search advertising revenue from the Safari browser.

“We have focused on delivering great experiences for the Apple ecosystem,” Pichai said. “It is something we take very seriously and I’m confident — we have many ways to make sure our products are accessible. We see that today, AI Overviews have been a popular feature on iOS when we have tested, and so we’ll continue — including Gemini. We’ll continue working to bring that there.”

WATCH: Alphabet CEO on report OpenAI trained GPT-4 on YouTube: We have clear terms of service