Baidu share rises due to planned IPO of AI chip division Kunlunxin

Chip-making subsidiary aims for potential market valuation of €43.8bn

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Baidu’s share price climbed strongly following news that Kunlunxin, the company’s AI semiconductor division, is planning an IPO on the Hong Kong stock exchange. The potential listing could lead to a market valuation of around €43.8 billion for the subsidiary.

According to a report by The Information, prospective investors were required to purchase hardware worth three to seven times the amount they planned to invest in the upcoming IPO.

Although Baidu submitted a confidential application for the listing earlier this year, the specific framework and scale of the IPO had not yet been definitively determined.

Kunlunxin, founded in 2011, mainly supplies chips to Baidu. However, the company operates as an independent entity and has expanded its customer base to external clients over the past two years. According to Reuters, there are also indications that ByteDance has shown interest in the company’s technology.

The strategic move is in line with China’s broader objective of strengthening its competitiveness within the global AI industry. Analysis by the think tank Bruegel shows that, although the United States is currently in the lead in terms of AI hardware and semiconductor infrastructure, China is making significant progress in closing the gap.

This progress is supported by a huge domestic market and state-backed open-source toolkits, which help sustain the domestic ecosystem as it matures.

Business AM

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