Beijing's traffic police have started the investigation to see if the company has actually broken any laws, as it is not really sure.
Baidu is taking a leading role in the development of self-driving cars in China and unveiled a broad alliance for self-driving cars as it aims to get such vehicles on the road in China by 2019.
Beijing traffic police said in its statement that police support technology and innovation of autonomous driving, but it should be conducted legally, safely and scientifically. It warned any violations of the law will lead to punishment.
Baidu CEO Robin Li conducted a live video chat with participants of the firm's artificial intelligence conference on Wednesday, projecting him on a huge screen sitting in the passenger seat of a self-driving car while on Beijing roads.
The episode generated discussion online, with some questioning whether Baidu had permission to conduct the test, while others said the car appeared to violate traffic rules.