Baidu’s semiconductor unit Kunlunxin files for Hong Kong listing amid AI chip boom in China
Baidu Spins Off AI Chip Unit Kunlunxin for Hong Kong IPO, Capitalizing on Domestic Tech Push
Hong Kong/Beijing — Chinese technology leader Baidu has taken a decisive step toward listing its artificial intelligence chip subsidiary, Kunlunxin, on the Hong Kong Stock Exchange. The move, announced via a confidential filing, aims to unlock value and attract specialized investment amid a national drive for semiconductor self-sufficiency and tightening U.S. export controls.
The proposed spin-off, which requires regulatory approval and is not guaranteed to proceed, would see Kunlunxin operate as a publicly traded subsidiary. Baidu, which currently owns approximately 59% of the unit, stated the listing would highlight its independent growth potential and expand its financing options in a high-stakes race for AI hardware dominance.
Strategic Shift: From Internal Supplier to Market Player
Founded in 2012, Kunlunxin is central to Baidu's ambition to be a "full-stack" AI company. Initially developed to power Baidu's own data centers and Ernie AI models, the unit has undergone a significant strategic pivot, increasingly selling its chips to third-party customers. Analysts project that external sales accounted for over half of its revenue in 2025, with total revenue expected to surpass 3.5 billion yuan ($500 million).
"The move to list is a clear signal that Kunlunxin is transitioning from a cost center supporting Baidu's internal needs to a competitive, market-facing business," said a sector analyst. This evolution mirrors a broader trend where mastering a complex, multi-faceted technological ecosystem is key to survival and growth.
Riding the Wave of Domestic Substitution
The listing plan arrives as U.S. restrictions on advanced AI chip exports accelerate China's push for domestic alternatives. While industry experts note that Kunlunxin's chips currently serve inference workloads and cannot fully replace top-tier Nvidia GPUs for all tasks, they are gaining traction in government, telecom, and state-owned enterprise projects where supply stability and cost are paramount.
Notable commercial validation came in 2025 when Kunlunxin secured orders worth over 1 billion yuan from suppliers to state-owned telecom giant China Mobile, which also participated in a recent funding round that valued the chip designer at about 21 billion yuan. The company is now part of a growing cohort of domestic chipmakers, including Moore Threads and Biren Technology, seeking public listings.
Market Context and Future Challenges
Baidu's decision underscores a strategic calculation to capitalize on investor appetite for semiconductor and AI assets. JPMorgan analysts have forecasted that Kunlunxin's chip sales could grow sixfold to 8 billion yuan in 2026. However, the success of this strategic maneuver hinges on navigating global geopolitical tensions, advancing manufacturing capabilities, and competing within an increasingly crowded field of domestic players like Huawei and Alibaba.
The proposed IPO of Kunlunxin marks a critical inflection point, not just for Baidu but for China's broader ambition to forge a self-reliant AI computing ecosystem.
