Baidu Inc (BIDU  ) is forming tighter connections with U.S. tech giants like Apple Inc (AAPL  ) and Tesla Inc (TSLA  ), leveraging China's overseas data transfer restrictions to expand its focus beyond its traditional search business.

Reports indicated that Apple has engaged in preliminary discussions to incorporate Baidu's generative AI technology into its devices. CEO Tim Cook's Shanghai store launch highlights Apple's ambitions in the country despite geopolitical tensions.

Baidu is reducing its dependence on ad revenue by enhancing its cloud services and pushing into AI and autonomous driving technologies, Nikkei Asia reports.

Baidu is deepening its collaboration with Tesla, particularly in autonomous driving. Xu Baoqiang, head of Baidu's autonomous driving technology, expressed interest in exploring self-driving taxi partnerships.

Since partnering with Tesla in 2020 to provide map data for Tesla vehicles in China, Baidu plans to supply lane-level navigation data that is expected to support the rollout of Tesla's Full Self-Driving (FSD) system in China.

While Baidu uses advanced lidar systems for its self-driving technology, Tesla utilizes cameras and economical computers, presenting a potential area for collaborative growth.

During Tesla's recent earnings call, Elon Musk voiced his ambitions to launch FSD in new markets, including China. FSD is a critical technology in accomplishing Tesla's vision of full autonomy.

Reportedly, Tesla is eying a data center in China to achieve its self-driving development goals.

Price Actions: BIDU shares are trading lower by 2.68% at $105.95 premarket at last check Tuesday.