Kunlunxin, the company responsible for developing computer chips for Baidu, is reportedly preparing for a share sale on the Hong Kong stock exchange. According to three individuals familiar with the matter, the company recently concluded a fundraising round, valuing it at 21 billion yuan, equivalent to $2.97 billion.
This planned stock offering comes at a time when China is actively working to strengthen its domestic chip industry. In response to restrictions imposed by the United States on the sale of advanced computer chips to China, Beijing is prioritizing the development of indigenous chip manufacturing capabilities. Consequently, several other Chinese chip manufacturers are also pursuing initial public offerings.
There is currently significant investor interest in artificial intelligence (AI) chip companies. Notably, Moore Threads commenced trading on the Shanghai Stock Exchange on Friday, with its shares experiencing a surge of more than five times the initial offering price. Moore Threads specializes in graphics processing units designed to power artificial intelligence systems.
According to documentation reviewed by Reuters, Kunlunxin aims to complete its stock sale by the first quarter of 2027. Two individuals with knowledge of the situation indicated that the company plans to submit its listing application to the Hong Kong Stock Exchange within the first three months of 2026.
Recent Funding Round Boosts Valuation
Kunlunxin successfully concluded its latest funding round within the past six months. The company secured over 2 billion yuan from investors, including a China Mobile investment fund and other private backers, as confirmed by three separate sources. This recent funding round has elevated the company's valuation to approximately 21 billion yuan, an increase from its previous valuation of 18 billion yuan.
The individuals who provided this information requested anonymity, as the company has not yet made these details public.
The heightened urgency for Chinese chip companies to go public stems from the strategic importance of domestic chip production for China. This is further emphasized by the U.S. government's prohibition on the sale of Nvidia's latest chips to Chinese buyers. Kunlunxin is joining a growing number of Chinese chip enterprises seeking to list on public markets. Following the debut of Moore Threads, MetaX is expected to begin trading in the coming weeks. Biren Technology, which has been placed on a U.S. blacklist, is also reportedly planning a listing in Hong Kong.
Baidu established Kunlunxin in 2012 as an in-house division for AI chip development. While the unit now operates independently, Baidu retains a controlling stake. Initially, Kunlunxin exclusively produced chips for Baidu's internal requirements. However, over the past two years, the company has expanded its customer base to include external clients as major Chinese technology firms increasingly seek to reduce their dependence on foreign-sourced chips.
Investment documents reveal that Kunlunxin projects revenues exceeding 3.5 billion yuan for the current year, with an expectation of achieving profitability. In 2024, the company incurred a loss of approximately 200 million yuan on revenues around 2 billion yuan. This year, more than half of Kunlunxin's revenue is anticipated to come from sales to external customers, according to two sources.
Latest Product Line Gains Market Traction
The company's flagship chip, the P800, has demonstrated strong sales performance this year, with primary customers including state-owned enterprises and government agencies involved in data center construction. Last month, Kunlunxin unveiled two new chip products. The M100, designed for running AI programs, is slated for release in early 2026. The M300, capable of both training and running AI systems, is scheduled for release in early 2027.
Following the news of Kunlunxin's listing plans on Friday, Baidu's stock price in Hong Kong saw an increase of up to 7.8%. This surge in Hong Kong listings reflects a broader trend of Chinese companies opting for the Asian financial hub over U.S. markets for their initial public offerings.