This article first appeared on GuruFocus .
Baidu Inc. ( NASDAQ:BIDU ) is edging closer to a potential Hong Kong listing for its artificial-intelligence chip unit, after Kunlunxin hired banks to prepare for an initial public offering that could raise as much as $2 billion, according to people familiar with the matter. The lead banks include China International Capital Corp., Citic Securities Co. and Huatai Securities Co., with China Securities International also involved, the people said. Deliberations are still ongoing, and the final size of the deal could change, with some scenarios pointing to a raise closer to $1 billion. Baidu said on Jan. 2 that Kunlunxin had confidentially filed for the IPO last week, while company and bank representatives either declined to comment or did not respond to inquiries.
Kunlunxin designs chips that power servers in data centers and was formed partly to meet Baidu's own growing demand for computing power across its online businesses. The unit is among a limited group of Chinese companies capable of developing advanced AI accelerators, a capability that could be increasingly relevant as Beijing pushes for technological self-reliance. Alongside companies such as Huawei Technologies Co. and Cambricon Technologies Corp., Kunlunxin is viewed as potentially contributing to efforts to reduce China's reliance on US technology, including chips supplied by Nvidia Corp.
The timing of the planned offering aligns with strong investor interest in AI-related listings in Hong Kong, where the sector is seen as strategically important by Chinese policymakers. Shanghai Biren Technology Co.'s shares rose 76% on their Hong Kong debut last week, while other AI companies that listed on mainland exchanges late last year recorded triple-digit gains on their first trading day. Against that backdrop, Kunlunxin's potential IPO could be closely watched as another signal of capital-market support for China's domestic AI chip ambitions.
