Beijing~July 7. Baidu’s AI chip subsidiary, Kunlunxin, is moving toward a Hong Kong stock market listing as China intensifies efforts to strengthen its domestic semiconductor industry.
According to The Information, which cited two people familiar with the matter, Kunlunxin is seeking a valuation of about $50 billion.
The outlet also reported that prospective investors were encouraged to purchase the company’s AI chips in amounts worth three to seven times the size of their planned investment.
Baidu has confirmed that it intends to spin off Kunlunxin through a separate Hong Kong listing but has not commented on the reported valuation.
In January Bloomberg also reported that Kunlunxin had hired investment banks to prepare for a Hong Kong IPO that could raise about $2 billion, although the size and timing of this offering remain subject to change.
Baidu’s AI was originally developed to handle Baidu’s own artificial intelligence computing needs.
Kunlunxin has since expanded into selling AI chips and cloud computing services to enterprise customers.
This expansion comes as Beijing ramps up efforts to reduce China’s dependence on foreign semiconductor technology following recent tighter U.S. export controls on advanced AI chips.
The company competes with domestic rivals including Huawei and Cambricon while also challenging Nvidia and AMD in parts of the AI computing market.
U.S. export restrictions have limited the sale of some advanced AI chips to China, creating more opportunities for local chipmakers to gain market share.
Baidu’s regulatory filings show that Kunlunxin has secured backing from several state-supported investors, including the Beijing Artificial Intelligence Industry Investment Fund.
The company has also expanded into Shanghai’s Lingang New Area, a government-backed center for semiconductor and advanced manufacturing development.
Baidu said separating Kunlunxin into an independently listed company would give the chip business direct access to capital while allowing the parent company to sharpen its capital allocation strategy and better align management incentives with long-term growth.
Reuters previously reported that ByteDance had shown interest in Kunlunxin’s AI chips.
However, Chinese outlet The Paper later cited a source close to ByteDance as saying the company had no plans to work with Kunlunxin.
Tencent did not respond to request for comment.
Whether Kunlunxin can justify the reported $50 billion valuation remains one of the biggest questions for investors.
At this stage, Baidu has confirmed only the planned spin-off and confidential Hong Kong listing.
Details about Kunlunxin’s financial performance, customer base, research spending, business risks and any final valuation are expected to emerge in future IPO filings.
