Beijing: Baidu’s rapidly growing artificial intelligence semiconductor arm, Kunlunxin, is preparing for one of the most closely watched tech listings in China’s AI hardware sector, following a major fundraising round that valued the company at nearly 21 billion yuan (about US $2.97 billion), according to sources familiar with the deal.
The fundraising, completed over recent months, drew interest from a wide range of strategic and state-linked investors. Among the notable participants was an investment vehicle associated with China Mobile, signalling strong state-sector confidence in the company’s technological direction and long-term market relevance.
The new valuation reflects a sharp rise from its previous estimated worth of 18 billion yuan, underscoring investor belief in the domestic AI-chip race an arena in which Kunlunxin has become one of China’s most visible contenders.
Internal documents reviewed by Reuters indicate that Kunlunxin intends to file its prospectus with the Hong Kong Stock Exchange (HKEX) as early as the first quarter of 2026. If approved, the company hopes to complete its IPO in early 2027, positioning it among the few Chinese AI-chip developers to debut publicly in a still-challenging global market.
Hong Kong rather than Shanghai or Shenzhen was reportedly chosen to ensure broader access to international capital and to avoid the stricter regulatory scrutiny currently applied to AI-related listings in mainland bourses.
Analysts say the listing could become a major milestone for China’s push for semiconductor independence, especially as Beijing continues to strategically channel resources into AI computing, data-centre technology and chip architecture research.
Kunlunxin’s beginnings trace back to 2012, when Baidu established a specialised internal lab to design AI-focused accelerators tailored to its search algorithms and natural-language processing platforms. Over the years, the unit gradually evolved, benefiting from Baidu’s heavy investment in AI research, cloud computing, and autonomous driving.
In 2021, Baidu structured Kunlunxin as a standalone subsidiary to attract outside funding and accelerate product development. While Baidu remains the controlling shareholder, the subsidiary now supplies chips to a variety of public and private clients marking a shift from internal dependency to wider industry integration.
Sources told Reuters that more than half of Kunlunxin’s 2025 revenue now comes from external customers, a significant leap from just a year ago. Revenue for 2025 is projected to exceed 3.5 billion yuan, putting the company on track to break even after posting a loss of roughly 200 million yuan in 2024.
Kunlunxin’s momentum comes at a pivotal moment for China’s broader semiconductor landscape. U.S. export restrictions on advanced AI chips including those from Nvidia, AMD and other Western manufacturers have forced Chinese firms, cloud platforms and government-backed mega-data-centre projects to increasingly rely on domestic alternatives.
Kunlunxin’s flagship P800 AI processor has seen strong adoption this year, especially in state-supported AI computing hubs built as part of China’s national “East-Data, West-Computing” initiative. These hubs are designed to redistribute computing loads across regions and reduce energy strain on coastal cities.
Industry analysts say Kunlunxin is emerging as one of the few Chinese chipmakers capable of delivering commercially viable AI accelerators at scale. The company’s technological advances are especially critical as domestic firms scramble to fill the void left by American chip restrictions.
As it prepares for public listing, Kunlunxin is accelerating the rollout of two major new AI chips:
Designed for AI inference tasks—including image recognition, chatbot responses, and lightweight training the M100 is expected to target cloud providers, smart-city platforms, and industrial automation systems.
Positioned as a more advanced product capable of both AI training and deployment, the M300 aims to compete directly with higher-end foreign AI accelerators, though still within the constraints of Chinese manufacturing capabilities.
These launches are expected to significantly boost Kunlunxin’s product portfolio at a time when demand for AI-cloud infrastructure is rising rapidly across China.
Kunlunxin’s IPO preparations unfold against a backdrop of escalating Sino-U.S. tensions over semiconductor technologies. The United States has progressively tightened restrictions on the export of advanced AI chips, chip-making tools, and related technologies to China.
As a result, Beijing has prioritised indigenous chip development in its industrial blueprints, providing subsidies, policy support and state financing to companies like Kunlunxin. Analysts note that the company’s rapid valuation growth aligns closely with this national push for tech self-reliance.
Moreover, China’s appetite for AI infrastructure ranging from generative AI platforms to surveillance systems and industrial robotics continues to expand domestically, creating a massive internal market for AI chips.
If Kunlunxin succeeds with its Hong Kong listing, it could:
• Set a benchmark for other AI-chip developers considering public markets
• Improve Baidu’s financial flexibility, allowing the parent company to reinvest in autonomous driving and cloud AI
• Boost investor confidence in China’s maturing semiconductor ecosystem
• Provide capital for mass production, helping Kunlunxin scale more aggressively
• Accelerate innovation, especially as domestic firms seek alternatives to banned U.S. chips
For Hong Kong’s stock market which has struggled with declining tech listings since 2022 the IPO could bring renewed momentum and global investor interest.
Kunlunxin’s rise embodies China’s determination to build a home-grown AI-chip ecosystem capable of supporting everything from government digital infrastructure to commercial generative-AI models. The company’s upcoming IPO is expected to be closely monitored by global markets, policymakers, and industry watchers alike.
If successful, the listing could mark one of the most significant breakthroughs in China’s semiconductor journey, demonstrating that domestic firms can expand, innovate and compete even amid unprecedented geopolitical pressure.