Key takeaways Baidu’s AI chip unit Kunlunxin filed confidentially for a Hong Kong IPO on Friday, with details such as deal size and structure yet to be finalized. The move places Kunlunxin among a gro...
Chinese tech giant Baidu has confidentially filed for an initial public offering of its artificial intelligence chip subsidiary Kunlunxin in Hong Kong, joining a surge of domestic chipmakers seeking capital amid intensifying U.S.-China technology tensions.
The Beijing-based company submitted its listing application to the Hong Kong Stock Exchange on Friday, though details including the offering size and structure remain undecided, Baidu said in a statement.
The company emphasized there is no guarantee the spin-off will proceed and that regulatory approvals, including from China's securities watchdog, are still required.
Baidu's Hong Kong-listed shares rose 9.4% to HK$143.80 on Friday, marking the stock's highest close since July 2023. The shares climbed 59% throughout 2025.
The listing comes as Beijing intensifies its push for technological self-reliance following U.S. export restrictions that have limited Chinese companies' access to advanced chips from Nvidia.
Both Washington and Beijing have imposed various restrictions on AI chip access, prompting China to mobilize billions in public funds toward domestic semiconductor development.
Gary Ng, senior economist at Natixis Corporate and Investment Bank, said the geopolitical tensions have accelerated China's semiconductor ambitions.
"The US tech blockade has made it even more urgent for China to move quickly up the value chain, build indigenous production capability and secure the first-mover advantage in AI," Ng told the South China Morning Post.
Baidu stated that spinning off Kunlunxin would better reflect the unit's standalone value and appeal to investors focused on general-purpose AI computing chips and related software and hardware systems. The company reportedly owns approximately 59% of Kunlunxin, and the extent of its holdings following the IPO remains uncertain.
Founded in 2012, Kunlunxin launched its first product, the XPU chip, in 2017.
The company has since evolved from serving primarily as an internal supplier to Baidu into a major third-party chip vendor, with external sales expected to account for more than half of its 2025 revenue.
Brady Wang, associate director at Counterpoint Research, highlighted Kunlunxin's competitive advantages in the Chinese market.
"In the market, Kunlunxin is seen as one of the most practical and widely used AI chips in China," Wang told CNBC.
He added that the chipmaker's strength lies partly in its software compatibility: "Instead of forcing users to adopt a closed system, Kunlunxin works well with common AI frameworks and makes it easier to move workloads from [Nvidia]."
However, Wang cautioned that Kunlunxin cannot fully replace Nvidia chips due to Beijing's ongoing constraints in advanced chip manufacturing.
"[Kunlunxin's chips] work best for inference and other workloads that are easier to move, especially for government, telecom, and state-owned cloud users, where stable supply and lower cost matter more than top performance," he said. "Because of this, Beijing is not relying on a single company."
Reuters previously reported that Kunlunxin's revenue is projected to exceed 3.5 billion yuan ($500 million) in 2025, reaching break-even after previous losses.
JPMorgan analysts have forecast that the company's chip sales could increase sixfold to 8 billion yuan in 2026.
Kunlunxin has secured significant contracts with state-owned enterprises, winning orders worth over 1 billion yuan from suppliers to China Mobile, one of the country's largest mobile carriers.
China Mobile also participated in Kunlunxin's latest funding round, which raised over 2 billion yuan and valued the unit at approximately 21 billion yuan.
State-owned investors, including the Beijing Artificial Intelligence Industry Investment Fund and the China Internet Investment Fund, back the company.
Kunlunxin's IPO filing signals the continuation of a robust pipeline of Chinese semiconductor listings.
Shanghai Biren Technology, another AI chip designer, debuted in Hong Kong on Friday with shares surging 82% in early trading after raising $717 million. The company's retail tranche was oversubscribed approximately 2,348 times.
In 2025, 20 Chinese semiconductor IPOs raised over 45 billion yuan ($6.4 billion), with six listings occurring in December alone.
The entire chip industry raised over 185 billion yuan across 1,419 cases, topping all sectors. Hong Kong's equity market saw $36.5 billion raised from 114 new listings in 2025, the city's highest since 2021.
Other Chinese GPU developers, including Moore Threads Technology and MetaX Integrated Circuits, have seen explosive debuts on the Shanghai Stock Exchange, with first-day gains of 425% and 693% respectively.
Together with Biren and Enflame Technology, these companies are known as the "Four Little Dragons" of China's GPU sector.
Baidu said Friday that Kunlunxin's separate listing would raise its profile among customers, suppliers, and potential partners, allowing the unit to solicit more business and tap equity and debt capital markets for additional funding.
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