In a recent announcement, Chinese tech giant Baidu (NASDAQ:BIDU) and Qualcomm (NASDAQ:QCOM) have revealed a strategic partnership aimed at advancing extended reality (XR) technology and metaverse infrastructures. This collaboration, unveiled on Friday, highlights generative AI as a focal point of their joint efforts.

The partnership entails the integration of Qualcomm's Snapdragon Spaces XR developer platform into Baidu's XiRang metaverse platform. This integration is anticipated to accelerate the development of XR applications, facilitating swift deployment of services across diverse sectors like tourism, education, and sports.

Cheng Lixin, Qualcomm's global Senior Vice President, expressed confidence in the partnership's potential to drive metaverse growth in China. However, this development occurs at a time when interest in the metaverse and extended reality has slightly waned, with generative AI applications garnering increased attention.

It's worth noting that Meta (formerly Facebook, NASDAQ:META), which rebranded in 2021 with a metaverse-focused agenda, shifted its focus towards AI during a March earnings call. CEO Mark Zuckerberg, despite initially emphasizing the metaverse as a "high-priority growth area," later highlighted "advancing AI" as the company's "single largest investment."

The venture financing landscape for virtual reality (VR) and augmented reality (AR), integral components of the metaverse, has also experienced a slowdown in 2023. According to data from GlobalData's deal database, financing deals in these domains amounted to $521 million as of September 15, 2023. This figure signifies a notable decrease from the previous year's $1.6 billion in VR and AR financing deals.

This recent partnership isn't Baidu's initial foray into collaborative ventures aimed at technological advancement. Back in 2017, Baidu and Qualcomm initiated efforts to optimize Baidu’s DuerOS conversational AI system for smartphones on the Qualcomm Snapdragon Mobile Platform. Moreover, Baidu has engaged in collaborative projects with Intel (NASDAQ:INTC) since 2020, encompassing AI, 5G, data center, and cloud computing infrastructure.

The alliance between Baidu and Qualcomm underscores a strategic pivot towards the development of AI technologies and the metaverse. Yet, the trajectory of this collaboration amid evolving technological trends and investment patterns remains to be observed.