Apple has made a $1 billion investment in China’s ride-hailing app Didi Chuxing, in a move CEO Tim Cook said would help the company “learn more” about the Chinese market.
Didi Chuxing, formerly Didi Kuaidi, released a statement that the investment was its single largest since its foundation in 2012. The Beijing-headquartered firm, which was recently valued at $25bn, completes over 11m rides per day and holds 87% of China’s ride-hailing market.
For Apple, whose sales in China have recently dropped, the investment is a chance to better understand the country – and to send a statement of intent. “We are making the investment for a number of strategic reasons, including a chance to learn more about certain segments of the China market,” Cook told Reuters.
“Of course, we believe it will deliver a strong return for our invested capital over time as well,” he added. The injection is Apple’s biggest since it spent $3bn in 2014 to acquire Beats Electronics, which helped launch its Apple Music platform. Experts believe this move to be closely linked to Apple’s plans to build an autonomous electric vehicle.
For Didi Chuxing the move is another intriguing episdoe in its growing battle with UberChina for the world’s biggest ride-hailing market. Didi is a partner with global Uber rival Lyft, and is currently available in over 400 Chinese cities – around four times Uber’s presence.
“Didi has grown from a taxi-hailing app into a multi-product transit platform offering Taxi, Private Car, Hitch, Bus, chauffeur and other services to 300 million citizens as China goes through the world’s largest urbanization process,” the company declared in an April 28 statement.
“Didi intends to build out an open platform with leading machine learning capabilities where rideshare solutions, electric vehicles and self-driving technologies link up riders and drivers with different needs in a sustainable and inclusive urban ecology.”
So meteoric has Didi’s rise been, that president Jean Liu was recently selected as China’s torchbearer at the 2016 Olympics in Rio this summer. “The next phase for us is really to invest more in artificial intelligence and machine learning,” she said in a recent interview with Bloomberg. “Based on 11m rides scaled, people should not make decisions any more.
“It should be machines making decisions.”