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Baidu's Chip Unit Kunlunxin Hires Banks for $2 Billion Hong Kong IPO

MarketDash Editorial Team
1 day ago
Baidu is taking its AI chip division Kunlunxin public in Hong Kong, potentially raising up to $2 billion. The move underscores China's urgent push to build domestic alternatives to Nvidia as U.S. export restrictions tighten.

Baidu Inc. (BIDU) is getting serious about spinning off its AI chip business. The Chinese tech giant's Kunlunxin division has tapped a lineup of major banks to prepare for a Hong Kong IPO that could bring in as much as $2 billion, according to Bloomberg reporting on Wednesday.

Kunlunxin picked China International Capital Corp, Citic Securities, and Huatai Securities as lead underwriters, with China Securities International also joining the deal team. The final size is still being hammered out and might end up closer to $1 billion, sources told Bloomberg.

The move isn't exactly surprising. Baidu shares jumped on January 2 after the company announced plans to separate Kunlunxin into a standalone public entity. The strategy is designed to shine a spotlight on the chip unit's business, expand funding sources, and sharpen management focus. Baidu currently owns about 59% of Kunlunxin and expects to keep it as a subsidiary even after the listing.

Baidu confirmed last week that Kunlunxin confidentially filed for a Hong Kong listing, making this IPO one of the more closely watched developments in China's tech sector this year.

Why China Needs Its Own Chip Champions

Here's the bigger picture: Baidu is positioning itself as one of China's most critical homegrown AI chip developers, stepping up alongside Huawei as U.S. export controls continue choking off access to advanced processors from Nvidia Corp. (NVDA).

With Nvidia's most powerful AI chips effectively banned from the Chinese market, Kunlunxin has evolved from an internal infrastructure project into something closer to a strategic national asset. The unit is now focused on filling a widening supply gap in data-center infrastructure and large-model computing, the kind of hardware that powers everything from chatbots to autonomous vehicles.

This shift illustrates how China's biggest technology companies are scrambling to build out domestic AI hardware ecosystems as geopolitical tensions continue reshaping the global chip supply chain. It's not just about corporate strategy anymore. It's about technological sovereignty.

The Roadmap and Revenue Opportunity

Baidu has laid out a five-year chip development roadmap. The Kunlun M100 is slated for release in 2026, followed by the more advanced M300 in 2027. The chips are already being deployed in data centers and telecom workloads, and Kunlunxin has started securing orders from partners connected to China Mobile.

Analysts view Baidu's chip push as both a competitive necessity and a genuine growth opportunity, especially given China's acute shortage of advanced AI processors. JPMorgan expects Baidu's chip revenue to jump sixfold by 2026. Other analysts are valuing Kunlunxin as a major standalone AI hardware business with significant upside.

At the same time, Baidu is restructuring internally. The company is cutting costs, reshuffling AI leadership, and doubling down on AI cloud services and autonomous driving. The goal is to accelerate execution and cement its role as a core supplier in China's homegrown AI ecosystem.

BIDU Price Action: Baidu shares were up 0.67% at $147.40 during premarket trading on Wednesday. The stock is approaching its 52-week high of $151.42.

Back to Stock Market News

Baidu's Chip Unit Kunlunxin Hires Banks for $2 Billion Hong Kong IPO

MarketDash Editorial Team
1 day ago
Baidu is taking its AI chip division Kunlunxin public in Hong Kong, potentially raising up to $2 billion. The move underscores China's urgent push to build domestic alternatives to Nvidia as U.S. export restrictions tighten.

Baidu Inc. (BIDU) is getting serious about spinning off its AI chip business. The Chinese tech giant's Kunlunxin division has tapped a lineup of major banks to prepare for a Hong Kong IPO that could bring in as much as $2 billion, according to Bloomberg reporting on Wednesday.

Kunlunxin picked China International Capital Corp, Citic Securities, and Huatai Securities as lead underwriters, with China Securities International also joining the deal team. The final size is still being hammered out and might end up closer to $1 billion, sources told Bloomberg.

The move isn't exactly surprising. Baidu shares jumped on January 2 after the company announced plans to separate Kunlunxin into a standalone public entity. The strategy is designed to shine a spotlight on the chip unit's business, expand funding sources, and sharpen management focus. Baidu currently owns about 59% of Kunlunxin and expects to keep it as a subsidiary even after the listing.

Baidu confirmed last week that Kunlunxin confidentially filed for a Hong Kong listing, making this IPO one of the more closely watched developments in China's tech sector this year.

Why China Needs Its Own Chip Champions

Here's the bigger picture: Baidu is positioning itself as one of China's most critical homegrown AI chip developers, stepping up alongside Huawei as U.S. export controls continue choking off access to advanced processors from Nvidia Corp. (NVDA).

With Nvidia's most powerful AI chips effectively banned from the Chinese market, Kunlunxin has evolved from an internal infrastructure project into something closer to a strategic national asset. The unit is now focused on filling a widening supply gap in data-center infrastructure and large-model computing, the kind of hardware that powers everything from chatbots to autonomous vehicles.

This shift illustrates how China's biggest technology companies are scrambling to build out domestic AI hardware ecosystems as geopolitical tensions continue reshaping the global chip supply chain. It's not just about corporate strategy anymore. It's about technological sovereignty.

The Roadmap and Revenue Opportunity

Baidu has laid out a five-year chip development roadmap. The Kunlun M100 is slated for release in 2026, followed by the more advanced M300 in 2027. The chips are already being deployed in data centers and telecom workloads, and Kunlunxin has started securing orders from partners connected to China Mobile.

Analysts view Baidu's chip push as both a competitive necessity and a genuine growth opportunity, especially given China's acute shortage of advanced AI processors. JPMorgan expects Baidu's chip revenue to jump sixfold by 2026. Other analysts are valuing Kunlunxin as a major standalone AI hardware business with significant upside.

At the same time, Baidu is restructuring internally. The company is cutting costs, reshuffling AI leadership, and doubling down on AI cloud services and autonomous driving. The goal is to accelerate execution and cement its role as a core supplier in China's homegrown AI ecosystem.

BIDU Price Action: Baidu shares were up 0.67% at $147.40 during premarket trading on Wednesday. The stock is approaching its 52-week high of $151.42.