Shares of Baidu Inc surged on Monday following media reports that the company's artificial intelligence chip unit, Kunlunxin, is targeting a valuation of about $50 billion in an initial public offering in Hong Kong. The stock jumped over 7% to HK$105.80 and ranked among the largest contributors to gains in the Hang Seng index.
According to the reports, Kunlunxin has been encouraging prospective buyers to acquire its chips as part of an apparent push to expand market adoption ahead of a potential listing. Baidu is reported to have made a confidential filing for a Hong Kong listing earlier this year, but specifics of any offering have not been made public.
Kunlunxin is described as central to Baidu's efforts to deepen its footprint in the artificial intelligence sector, in part because demand in China is increasing for domestically produced AI chips. The chip unit is already used to run Baidu's own AI programs, and the company has been seen preparing to supply those in-house chips to several other major technology firms within China.
Media accounts in June said that TikTok parent ByteDance was among firms considering the use of Kunlunxin chips, though ByteDance has recently denied those reports. Separate reporting also indicated that Tencent was already a customer of Kunlunxin.
Market commentary in the reports suggested that the chipmaker's offering could become one of the largest listings in Hong Kong in recent years, a development occurring against a backdrop of strong investor appetite for leading AI-related companies. That investor interest has also supported a wave of AI-focused IPOs in Hong Kong this year, with several Chinese AI startups such as Zhipu and Minimax registering sizable offerings and growth.
While the details of any planned offering remain unclear, the combination of a reported $50 billion valuation target, visible customer outreach and the potential for broader adoption by other tech companies has drawn investor attention and helped propel the parent company's shares higher on the trading day.