Another homegrown chip player is heading for a Hong Kong IPO.
During the New Year holiday, Baidu unexpectedly announced that its AI chip unit, Kunlunxin, has submitted a listing application to the Hong Kong Stock Exchange. The news immediately lifted sentiment—Baidu’s share price surged more than 8% intraday.
Kunlunxin began as an in-house Baidu project. After showing strong momentum, it started raising capital and operating independently in 2021. Baidu currently holds 59.45% of the company, and even after the spin-off listing, Kunlunxin will remain a Baidu subsidiary.
Its most recent funding round took place in July 2025, valuing the company at RMB 21 billion. Beyond Baidu, investors reportedly include Shanghe Momentum Capital, Shanxi Securities Investment, and BYD, among others.
With Kunlunxin joining the IPO wave, China’s chip sector is once again in the spotlight. Recent months have seen a steady stream of listings and preparations—from companies that have already made it to public markets, to others completing listing counseling, and multiple peers also reportedly targeting Hong Kong. The domestic chip industry is clearly kicking off the year with a high-stakes opening move.
What Baidu revealed about Kunlunxin’s Hong Kong IPO
According to Baidu’s announcement, Kunlunxin (Beijing) Technology Co., Ltd. has submitted a main board listing application to the HKEX on January 1, 2026, under a confidential filing.
In practical terms, the exchange has begun reviewing the materials, but the details are not publicly disclosed yet. For many companies, this is a standard and cautious approach—avoiding early exposure of financials, sensitive operating metrics, and a fixed timetable.
From the limited information released, Baidu’s emphasis is clear: this is about a “spin-off.”
Back in 2021, Baidu separated the chip business into an independent entity and completed its first external financing round, reportedly at a valuation of RMB 13 billion. That move effectively laid the groundwork for today’s listing plan.
Baidu also stated that HKEX has agreed for the company to proceed with its proposed spin-off. After the spin-off, Baidu will still remain the controlling shareholder, but Kunlunxin will become a separately listed company with its own identity in the capital markets.
In other words, after several years of operating independently behind the scenes, Kunlunxin is now stepping fully into the spotlight.
Why spin off Kunlunxin now
This time, Baidu also laid out its rationale more explicitly. At the core, it comes down to one goal: letting Kunlunxin be valued—and seen—on its own merits.
First, it enables standalone valuation. When Kunlunxin’s performance is blended into Baidu’s broader internet business, its position as a leading domestic AI chip company and its growth profile can be diluted in the market’s view. A separate listing allows investors to assess Kunlunxin as a pure-play AI chip and computing platform company, potentially unlocking value and improving Baidu shareholders’ overall equity value.
Second, it broadens the investor base. A listed Kunlunxin can attract investors focused specifically on AI chips, infrastructure software-hardware stacks, and foundational computing power—capital that is often more patient and aligned with the long R&D cycles typical for semiconductors.
Third, it strengthens governance and funding flexibility. Independent access to equity and debt markets can help support sustained, high-intensity R&D investment. A listed-company profile can also enhance credibility with customers, suppliers, and strategic partners—especially as Kunlunxin aims to expand beyond Baidu’s internal ecosystem and compete more openly as a neutral supplier.
At the same time, Baidu can sharpen its own resource allocation while Kunlunxin builds a more market-driven “self-funding” growth engine.
Overall, the spin-off is not a sudden decision—it is the continuation of a strategic path Baidu started in 2021.
Offering structure and shareholder arrangements
Baidu noted that the IPO is expected to be conducted via a global offering, including:
A public offering in Hong Kong for retail investors, and
A placement to institutional and professional investors.
The exchange has also approved an exemption that removes the requirement for Baidu to provide its existing shareholders with an assured allocation of Kunlunxin shares. In short: Baidu shareholders will not have preferential subscription rights.
Even so, the positive stock reaction suggests the market sees Kunlunxin as a meaningful asset with a story strong enough to stand on its own.
So what, exactly, makes Kunlunxin compelling?
Built inside Baidu, led by Ouyang Jian
If Kunlunxin’s origin can be summed up in one line, it’s this: it wasn’t born to sell chips—it was born to make computing power affordable.
Baidu CEO Robin Li once described the earliest motivation in blunt terms: buying chips for search workloads was expensive, so Baidu pushed itself to build its own.
Kunlunxin’s roots trace back to 2011, when Baidu quietly launched an internal FPGA-based AI accelerator project. FPGA (field-programmable gate array) solutions sit between general-purpose CPUs and fixed-function ASICs, offering a key advantage at the time: faster iteration and lower risk, because designs can be reconfigured without committing to a full tape-out immediately.
For Baidu, FPGA deployment provided a cost-effective way to validate AI acceleration paths early. The company reportedly scaled internal FPGA deployment dramatically, accumulating engineering experience and data-center operational know-how.
By 2017, Baidu publicly introduced its self-developed XPU architecture at the Hot Chips conference—an important step in establishing a technical foundation.
Building on that architecture, Baidu officially launched the Kunlun chip project in 2018. At Baidu’s AI developer conference that year, the company unveiled “Kunlun 1,” a cloud AI chip reportedly built on a 14nm process and designed primarily for AI inference. After its debut, the chip moved into large-scale production and deployment over the following years.
With that progress, Baidu began preparing Kunlunxin for independence. In April 2021, Kunlunxin (Beijing) Technology Co., Ltd. completed its first financing round as an independent entity, and Baidu’s chief chip architect, Ouyang Jian, became CEO.
That marked a clear shift—from an internal project to a market-facing chip company.
Speeding up after independence: product lines, clusters, and roadmap
After operating independently, Kunlunxin accelerated on two fronts.
One was product expansion. Centered on its XPU architecture, the company rapidly built a portfolio spanning cloud and edge—data-center accelerator cards and servers, integrated AI appliances for specific scenarios, and edge-computing boxes for terminal deployment. The direction is clear: a combined hardware-software stack and full-stack delivery capability.
The second was scaling compute. Its cloud products based on third-generation chips became core offerings, and the company reportedly delivered a 10,000-card-scale AI cluster.
By late 2025, Kunlunxin also disclosed a next-generation roadmap: the M100, optimized for large-scale inference, is expected to launch in 2026; the M300, aimed at ultra-large-scale multimodal training and inference, is expected around 2027.
Taken together, the trajectory is consistent: internal demand drove early breakthroughs, independence enabled broader commercialization, and now the capital markets are becoming the next lever for global competition.
In July 2025, the company’s valuation reportedly reached around RMB 21 billion. Ahead of the IPO news, Kunlunxin also completed an industrial-and-commercial registration change on December 16, 2025, updating its name to Kunlunxin (Beijing) Technology Co., Ltd. (a joint-stock company) and increasing registered capital from roughly RMB 21.28 million to RMB 400 million.
A projection attributed to JPMorgan estimates Kunlunxin’s revenue could rise from around RMB 1.3 billion in 2025 to RMB 8.3 billion in 2026—an increase of roughly sixfold. Based on an assumed 10x price-to-sales multiple, that line of thinking suggests a potential valuation north of RMB 80 billion, which would meaningfully increase the implied value of Baidu’s 59.45% stake.
Behind much of this journey stands CEO Ouyang Jian—both a core architect of the technical route and a key figure in guiding Kunlunxin into independent operations. Public profiles describe him as an engineering-driven leader with long-term focus on computing architectures and high-performance chips.
A broader IPO wave across China’s chip sector
Kunlunxin’s IPO is not happening in isolation.
In recent months, multiple domestic chip companies have been rushing toward public markets. The common logic is straightforward: after years of heavy R&D spending, leading players are entering a phase where products are landing at scale and revenue growth is starting to accelerate.
Going public is not just about prestige—it’s about building a stronger war chest for the next round of R&D, manufacturing partnerships, ecosystem building, and market expansion.
Investor enthusiasm has also been evident, with the market increasingly treating “compute power” as a core strategic asset.
And among the domestic players, Kunlunxin’s shipment performance has been difficult to ignore.
Shipment rankings: Kunlunxin remains near the top
According to an IDC report on China’s accelerator computing chip shipments in 2024, Nvidia accounted for about 70% of shipments, exceeding 1.9 million units.
Among domestic AI chip vendors, Huawei Ascend ranked first with around 640,000 units shipped, followed by Kunlunxin at about 69,000 units. Other domestic players cited include Biren, Enflame, MetaX, Cambricon, and others at varying shipment levels.
Whatever the exact outcome of the listing process, one thing is clear: Kunlunxin’s confirmation of an IPO plan has added fresh fuel to China’s chip market momentum.
The next chapter is only just beginning.
