(Yicai Global) July 25 -- Chinese tech giant Huawei Technologies will help Baiyao Group, a renowned traditional Chinese medicine company, to use artificial intelligence to develop new drugs.

Huawei and Baiyao penned a three-year cooperation agreement so that the handset retailer will provide the drugmaker with AI technologies involving molecular design and disease databases, the Yunnan province-based pharmaceutical company said in a statement at noon today. 

Baiyao is famous among global users of traditional Chinese medicine. It was named after a drug developed by its founder in the early 20th century to stop wounds from bleeding. 

Baiyao will prioritize using Huawei’s AI solutions to build its information and communications technology infrastructure. Consequently, Huawei may become a core ICT supplier for Baiyao and its affiliates, the firm added.

The partnership will bring the two companies' advantages in resources and technologies into full play, Baiyao said. It will advance the in-depth application of AI technologies in the Big Health industry, and enable the pair to jointly explore markets to achieve win-win results, it added. 

Huawei has been diversifying its business in recent years to help companies in different domestic industries to apply its ICT to improve their efficiency.

The news of cooperation boosted Baiyao’s stock price [SHE: 000538] by as much as 1.3 percent in the afternoon but the shares closed 0.5 percent up at  CNY56.83 (USD8.40) apiece.

Editor: Emmi Laine, Xiao Yi