The Shanghai municipal government and Chinese tech giant Baidu signed a strategic cooperation agreement Tuesday to develop artificial intelligence (AI) industry in the city.

According to the agreement, a Baidu innovation center will be built to make Shanghai a major AI development center. Baidu will also help Shanghai in building smart city.

Shanghai has talent from home and abroad and is open to the world, which provides a conducive environment for the company's future development, said Robin Li, chairman and CEO of Baidu.

"Baidu will increase its research and development investment, land more new modes, applications and products in Shanghai so as to make bigger contributions to the AI industry development and mega-city management in Shanghai," he said.

According to an AI industry development plan issued last year, Shanghai aims to build about 10 AI innovation platforms, and 10 leading AI innovation companies by 2020, when the city's AI industry will be worth more than 100 billion yuan ($14.4 billion).