Microsoft is teaming up with its Chinese frenemy to do for cars what Android did for phones
Notably, while Microsoft has long worked with auto manufacturers to build software for internet-connected cars, this is the company's first push into self-driving vehicles, specifically.
Earlier in July, Baidu unveiled Apollo, an open-source operating system for self-driving cars that any car company can use for free. At the time, Baidu announced that Nvidia, Ford, Intel, and Microsoft, among others, had signed up to contribute to the Apollo project, and maybe use it in their own vehicles.
It's a similar model as Google's Android, but for cars. The idea is that by working together, self-driving cars will get safer, faster.
"The purpose is very clear: We want to promote openness and accelerate innovation," Baidu President Ya-Qin Zhang tells Business Insider.
The thing, though, is that crunching the data produced by the Apollo operating system requires a whole lot of processing power. Within China, Baidu has that much processing power and more. Outside the country's borders, though, it doesn't have much of a presence - not ideal if you want Apollo to become adopted globally.
If Apollo is going to beat competitors like Uber and Alphabet's Waymo to rule self-driving cars, it needs to go bigger.
That's why Baidu tapped Microsoft, says Zhang. The Microsoft Azure cloud computing service has the computing horsepower to handle that heavy computational load, plus it's available in more countries than its rivals at Google and Amazon. By using Azure, Baidu and its partners can make Apollo available almost anywhere in the world, says Zhang.
The other side
On the Microsoft side, this partnership with a competitor reflects its current stance on the automotive industry. Microsoft isn't making a self-driving car of its own; while it does have the AI know-how and partnerships with companies like Volvo, it doesn't have a self-driving car operating system like Apollo.
"We're not in a position to deliver [self-driving cars] end-to-end," Microsoft corporate VP Kevin Dallas tells Business Insider.
Instead, Microsoft's current philosophy on the auto industry is centered around building tools for car companies to do with as they will, from data analysis to providing the Cortana digital assistant in the dashboard. In this case, that means helping make Apollo friendlier and more usable for manufacturers.
"Ultimately, that's what this is all about," says Dallas.
The endgame here, says Zhang, is for Apollo to spread out and accumulate the collective knowledge of every car company that chooses to use it. With that much data coming in, Zhang says, self-driving cars will get smarter, faster, facilitating their spread across the globe.
"It's going to completely transform the auto industry," says Zhang.
Get the latest Microsoft stock price here.