Baidu Inc. is planning to overhaul its business model, shifting from its current search oriented model to one that focuses on 'artificial intelligence.'

Baidu CEO Li Yanhong said in a company's internal letter on Tuesday that this change will help the company to develop new products in areas such as search, automatic translation, and driverless vehicles. Industry observers say that the shift in business model will likely affect the company's short-term profitability.

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Li also promised to put more emphasis on user experience and set up a department to weed out any action or behavior that damages its user' experience.

"The department will have the final say to veto any behavior that is not in line with a good user experience," Li said in the internal letter. "Some of the measures we take may have a negative impact on the company's income. But I believe it is the right thing to do."   

Li's pledge to root out questionable behavior comes amid an ongoing probe over the death of a 21-year-old college student. The student died last month after undergoing experimental treatment in a medical facility that was advertised on Baidu.

Following this incident, China's Cyberspace Administration ordered Baidu to overhaul its paid search result by the end of this month.

Many analysts see this as a major setback for the search engine giant as the company's profit, and revenue is expected to take a great hit.

This is not the first time that Baidu has been grilled by Chinese authorities.  Earlier this year, the search engine giant came under scrutiny for manipulating search results and disseminating pornographic ads on its site.

Tagschina, Baidu, Li Yanhong, Chinese Search Engine Gaint