Baidu's artificial intelligence chip subsidiary, Kunlunxin, is advancing plans for a dual listing, filing for an initial public offering on Shanghai's STAR Market while keeping its Hong Kong listing ambitions alive. The move comes as Chinese investors increasingly turn to domestic chipmakers amid tightening U.S. export restrictions on advanced semiconductors.
According to a filing with China's securities regulator, Kunlunxin signed a pre-IPO tutoring agreement with China International Capital Corp on April 29. In China's regulatory framework, such tutoring involves coaching and compliance steps that companies must complete before listing domestically. The development follows Kunlunxin's confidential application to the Hong Kong stock exchange in January, which Baidu disclosed earlier this year.
Baidu's Hong Kong-listed shares surged 5.75% on Friday, closing at HK$145.20 after reaching an intraday high of HK$145.90, as investors welcomed the news. Analysts at Jefferies, led by Thomas Chong, viewed the Shanghai listing as a significant step in Baidu's efforts to spin off Kunlunxin, noting that an onshore listing would provide Chinese AI model firms and chipmakers with better access to local capital. The team expects the Hong Kong debut to occur in the third quarter.
The timing is critical for Chinese tech companies, which face pressure to secure funding for homegrown computing infrastructure as U.S. restrictions cut them off from top-tier chips made by suppliers like Nvidia. Meanwhile, demand for inference—the processing needed to run already-trained AI models—continues to climb. Kunlunxin originally started as Baidu's in-house chip operation before being spun off as an independent entity, though Baidu retains control. Most of its chips have historically gone into Baidu's own products, but external sales have recently picked up. In December, Reuters estimated Kunlunxin's valuation at approximately 21 billion yuan, or nearly $3 billion, following a funding round.
Baidu is under pressure to demonstrate that its AI investments can offset softness in its traditional advertising business. In February, the company reported a 4% decline in fourth-quarter revenue, as sluggish ad sales wiped out gains from its cloud business. CEO Robin Li has called AI the "new core of Baidu," while finance chief Henry He disclosed that Baidu has invested over 100 billion yuan in AI over three years.
The competitive landscape is intensifying, with names like Moore Threads and Biren Technology attracting investor interest as Beijing pushes for homegrown chip options amid tightening U.S. component access. There is speculation that Alibaba will soon list its chip division, adding urgency for Baidu to act before the opportunity diminishes.
However, risks remain. Baidu has noted that the specifics of the planned spin-off—including size, structure, and timing—are still uncertain, pending approvals from both the Hong Kong exchange and Chinese regulators. The company also flagged that the deal may not proceed at all.
Investors will be watching closely as Baidu prepares to release its first-quarter earnings results on May 18, before the U.S. market open, followed by a management call with investors at 8 p.m. Beijing time that day.
