The No. 2 US automaker said it would develop new in-vehicle infotainment systems and digital services based on Baidu's voice-interaction system DuerOS for Ford owners in China.
Financial terms were not disclosed.
"As part of our 'In China, For China' strategy, we look forward to working closely to offer smart products and solutions that can make people's lives easier and more enjoyable," said Peter Fleet, president of Ford Asia Pacific.
DuerOS will enable car owners to command and communicate with their vehicles using natural language and allow people to easily access information and services that they need in daily life, Ford said.
The companies would also seek to set up a joint connectivity lab to investigate innovation opportunities across their automotive and mobility businesses in China and explore cloud computing, Ford said.
The two companies would also evaluate technologies and big data to explore opportunities related to targeted digital marketing, the US automaker said.
"Together...we will transform the mobility ecosystem and create the next-generation in-vehicle experience for consumers," said Ya-Qin Zhang, president of Baidu.
Ford and Baidu had collaborated previously in 2016 to jointly invest $150 million (roughly Rs. 1,000 crores) in Velodyne, which makes a key component in self-driving cars.
© Thomson Reuters 2018