Baidu’s AI Chip Unit Kunlunxin Files For Hong Kong IPO

Chinese tech giant Baidu plans to spin off its artificial intelligence chip unit, Kunlunxin, and list it on the Hong Kong Stock Exchange. This move comes as China pushes harder to build its own semiconductor industry and reduce reliance on foreign chips.

Baidu said it has confidentially filed for the listing, but the final size and structure of the IPO are still not decided. The plan also needs approval from Chinese regulators, and Baidu clarified that there is no guarantee the listing will happen. Currently, Baidu owns about 59% of Kunlunxin.

Baidu is a major player in China’s AI sector. It not only buys AI chips for cloud computing and data centers but also designs its own chips through Kunlunxin. By spinning off the unit, Baidu wants to highlight Kunlunxin’s independent value, attract focused investors, and raise more funds. Kunlunxin will still remain a Baidu subsidiary.

Growing Focus on Domestic Chips

This move comes amid rising U.S.-China tech tensions, with restrictions on Chinese companies accessing advanced AI chips from Nvidia. At the same time, Beijing is encouraging local chip development and investing billions to support domestic companies.

Several Chinese chipmakers, including Moore Threads and Biren Technology, have also announced listing plans recently.

Kunlunxin’s Role in Baidu’s AI Strategy

Founded in 2012, Kunlunxin plays a key role in Baidu’s goal to become a full AI company, covering hardware, data centers, AI models, and applications. While Baidu still depends on Nvidia chips, it now uses more of its own Kunlunxin chips to run its Ernie AI models.

Kunlunxin has also started selling chips to customers outside Baidu and is now operating more independently.

Industry experts say Kunlunxin is one of the most widely used AI chips in China, especially because its software works well with popular AI tools and makes it easier for users to shift from Nvidia systems.

Strong Growth and Future Outlook

Reports suggest Kunlunxin’s revenue crossed 3.5 billion yuan last year and reached break-even. External sales are expected to make up more than half of its revenue by 2025. The company also secured large orders from China Mobile and raised over 2 billion yuan in funding, valuing it at around 21 billion yuan.

Baidu believes listing Kunlunxin will improve management incentives and boost its market image. Analysts predict Kunlunxin’s chip sales could grow six times by 2026.

However, experts say Kunlunxin cannot fully replace Nvidia chips, especially for high-end performance. Instead, it works best for cost-effective and stable AI tasks, especially for government and telecom users. Kunlunxin is part of a larger domestic AI ecosystem that includes companies like Huawei, Alibaba, and Cambricon.