Baidu shares jump as Kunlunxin IPO report fuels AI optimism

Hong Kong-listed shares of Baidu climbed more than 7% on Monday after reports suggested that its artificial intelligence (AI) chip unit, Kunlunxin, is preparing for an initial public offering (IPO) in the city.

According to the report, the planned listing could value the AI chip affiliate at approximately $50 billion.

The rally came after The Information reported on Sunday, citing two people familiar with the matter, that prospective investors had been asked to purchase semiconductors worth three to seven times the value of their intended investment in Kunlunxin's planned IPO.

The report also said Baidu had confidentially submitted a listing application for Kunlunxin to the Hong Kong Stock Exchange at the beginning of the year.

However, details of the offering, including its size and structure, had not been finalised at that stage.

Kunlunxin expands beyond parent company

Founded in 2011, Kunlunxin primarily supplies AI chips to its parent company, Baidu.

Although Baidu continues to hold a controlling stake in the business, Kunlunxin operates independently.

Over the past two years, the company has expanded its focus beyond serving Baidu and has increased sales to external customers.

China's AI ambitions drive IPO recovery

The reported IPO plans come as China intensifies efforts to strengthen its position in the increasingly competitive global AI industry.

According to a report by Brussels-based economic think tank Bruegel, "Despite Chinese progress, the United States remains for now ahead in the race for dominance over the so-called artificial intelligence hardware stack, the resources and equipment, especially semiconductors, needed to run AI models."

At the same time, the think tank noted that "the signs of Chinese catch-up are real," pointing to factors including an open-sourced toolkit supported by a state-backed contributor pipeline and a sufficiently large domestic market capable of supporting the AI ecosystem during its early stages.

The broader technology IPO market in China has also shown signs of recovery as authorities increase support for semiconductor and AI-related listings.

The renewed momentum reflects the country's continued focus on technological self-reliance amid its ongoing competition with the United States.

Technology listings gather pace

According to LSEG data, technology companies raised a combined $3.1 billion through stock market listings in China between January and June 18.

The amount is more than five times higher than the capital raised during the corresponding period a year earlier, indicating a significant rebound in investor activity.

The IPO pipeline also continues to expand.

Reuters calculations, based on regulatory filings, showed that nearly 50 companies have submitted IPO applications across the Shanghai and Shenzhen stock exchanges.

The applicants include semiconductor companies and robotics start-ups. Together, they are seeking to raise at least 126.1 billion yuan ($18.7 billion).

Among the largest planned offerings is memory-chip manufacturer ChangXin Memory Technologies, which is preparing a 29.5 billion yuan IPO in Shanghai.

The proposed offering would become the largest domestic listing in China this year.

It would also lift total domestic IPO proceeds to their highest level in three years if completed.

The reported Kunlunxin listing, if it moves forward, would add further momentum to China's recovering technology capital markets while underscoring growing investor interest in AI and semiconductor businesses.