Prime Highlights :
- Baidu’s AI chip unit Kunlunxin is targeting a Hong Kong IPO that could value it at $50 billion.
- Baidu shares jumped more than 7% following reports of the planned listing.
Key Facts :
- Kunlunxin was founded in 2011 and primarily supplies AI chips to Baidu, while also expanding into external sales over the past two years.
- Brussels-based think tank Bruegel notes the US leads in AI hardware but acknowledges growing signs of Chinese advancement in the sector.
Background :
Hong Kong-listed shares of Baidu surged more than 7% on reports that its artificial intelligence chip unit Kunlunxin is targeting an initial public offering in the city, with the listing expected to value the affiliate at $50 billion.
Prospective investors were asked to purchase semiconductors worth three to seven times the value of their intended investment in the planned listing, according to reports citing two sources familiar with the matter.
Baidu confidentially filed a listing application for Kunlunxin on the Hong Kong Stock Exchange at the start of the year, though offering details, including size and structure, remained undecided at the time. ByteDance, the owner of TikTok, has also shown interest in Kunlunxin chips, according to earlier reports.
Founded in 2011, Kunlunxin primarily supplies chips to its parent company, Baidu. While Baidu retains a controlling stake, the unit operates independently and has expanded its scope to external sales over the past two years.
This is happening against the backdrop of China intensifying efforts to consolidate itself as a major player in the highly competitive AI industry. As per Bruegel, a Brussels-based think tank, the United States holds the number one position in terms of artificial intelligence hardware, in particular, the semiconductors that help to execute the workings of AI algorithms. However, the think tank went on to say that the proof of progress made by China is unjustifiable.