Baidu (BIDU) announced plans to spin off its artificial intelligence chip subsidiary Kunlunxin through a Hong Kong IPO, sending shares higher on Friday. While details of the offer size are yet to be decided, the Chinese tech giant filed a confidential listing application with the Hong Kong Stock Exchange. Baidu expects to maintain majority ownership of Kunlunxin following the spinoff, which still requires regulatory approvals.
The move reflects Beijing’s push for semiconductor self-sufficiency amid escalating U.S.-China tech tensions. Washington has restricted access to advanced Nvidia (NVDA) chips for Chinese AI companies. At the same time, Beijing has mobilized billions in public funding for domestic chip development and encouraged state-owned enterprises to buy locally.
Several Chinese chipmakers, including Moore Threads and Biren Technology, have announced similar listing plans in recent months. Founded in 2012, Kunlunxin sits at the center of Baidu’s ambition to become a full-stack AI company spanning hardware, data centers, AI models, and applications.
While Baidu still relies heavily on Nvidia chips for computing power, Kunlunxin has enabled the company to deploy its self-developed chips in data centers that run its Ernie AI models. The unit has also expanded beyond internal use to sell chips to third-party customers, with external sales expected to account for more than half of revenue in 2025.
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In Q3 of 2025, Baidu reported revenue of $4.4 billion, down 7% year-over-year (YoY). Notably, it posted a $2.3 billion impairment charge on outdated computing infrastructure that no longer meets current AI efficiency requirements. CEO Robin Li said the company wrote down older assets to create a healthier portfolio better aligned with advanced AI computing demands.
During the earnings call, Baidu provided visibility into its AI-powered businesses and future growth drivers. Its AI cloud infrastructure sales rose 33% to $588 million. Within this segment, subscription-based AI accelerator infrastructure revenue surged 128%, accelerating from a 50% growth last quarter.
finance.yahoo.com
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