Chinese Internet giant Baidu’s film unit iQIYI has entered into an alliance with Intel to enhance its online video platform. iQIYI was launched in 2010 with investments from Baidu and Providence Equity Partners. The online video provider will work with Intel to ramp up its video storage, cloud computing, trans-coding distribution, and big data analysis.

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Intel to help iQIYI enhance viewing experience

Under the terms of the agreement, Intel will help iQIYI renovate its data center and content distribution network by offering its technologies. The U.S. chipmaker will provide its PCIe/NVMe Solid State Drives (SSDs), Xeon processor, and 10GB Ethernet Adapters. Besides hardware, Intel’s virtualization technology will enable the Chinese company to boost its high-performance video platform with stable operation and data storage.

Intel general manager Douglas Cougle said the company would work closely with Baidu’s subsidiary to raise the technology bar in China’s booming online video industry. In September 2014, iQIYI entered into an agreement with Dolby Laboratories to enhance the viewing experience on its platform using Dolby technology. iQIYI will extend Baidu’s presence in the online video market. It will also help improve Baidu’s competitive position in this segment.

Baidu sees significant potential in online video market

According to Hollywood Reporter, about 60% of Chinese consumers watch movies and TV shows on their smartphones and tablets. Baidu’s iQIYI unit is aggressively building a presence in TV and movies both in China and Hollywood. This year, the company plans to acquire distribution rights to over 1,000 U.S. movie titles to meet rising demand for Hollywood content in China.

iQIYI plans to produce seven Chinese films and one Hollywood-style movie in 2015. According to research firm iResearch, the company will more than double its original production (movies and TV shows) from just 13 in 2014 to 30 titles and 500 episodes this year. Intel’s advanced technology should help it achieve its target.

Baidu shares inched up 0.11% to $220.60 in pre-market trading Wednesday.