Baidu Shares Rally as AI Chip Unit Kunlunxin Eyes $50 Billion Hong Kong IPO

Shares of Baidu rose more than 7% in Hong Kong after media reports said its artificial intelligence chip unit, Kunlunxin, is targeting an IPO in the city that could value the company at approximately $50 billion. The planned listing would represent one of the largest semiconductor offerings in Hong Kong and reflects growing optimism surrounding China's AI hardware sector.

According to reports, prospective investors were asked to purchase semiconductors worth three to seven times the value of their intended investment in Kunlunxin's IPO. Baidu had reportedly submitted a confidential listing application to the Hong Kong Stock Exchange earlier this year, although key details such as the size and structure of the offering were still being finalized.

Founded in 2011, Kunlunxin primarily develops AI chips and has historically supplied products to its parent company, Baidu. While Baidu continues to hold a controlling stake, the chipmaker operates independently and has expanded its business over the past two years by supplying processors to external customers as demand for AI computing infrastructure continues to grow.

The company has also attracted interest from major Chinese technology firms. Earlier reports indicated that ByteDance, the owner of TikTok, has evaluated Kunlunxin's AI chips as Chinese companies seek domestic alternatives amid tightening U.S. export restrictions on advanced semiconductor technology.

The potential IPO comes as China intensifies investment in its artificial intelligence ecosystem, particularly in semiconductor development. Domestic chipmakers have become increasingly important as Beijing seeks to reduce reliance on foreign technology while supporting the rapid expansion of AI applications across industries.

Although analysts believe the United States continues to lead in advanced AI hardware, recent research suggests China's capabilities are improving steadily. A report from Brussels-based think tank Bruegel noted that while the U.S. still maintains an advantage in critical AI infrastructure, China is narrowing the gap through open-source innovation, government-backed research initiatives and the scale of its domestic market, which provides strong support for the country's AI ecosystem.

If completed, Kunlunxin's Hong Kong listing would provide fresh capital to support research, product development and commercial expansion. The fundraising could further strengthen China's domestic AI chip industry at a time when competition over computing power and semiconductor technology has become a central focus of the global AI race.