Baidu Inc. announced on January 1, 2026 that it will spin off its AI‑chip subsidiary Kunlunxin and pursue a separate listing of the unit on the Hong Kong Stock Exchange. The company filed a confidential application with the HKEX and the China Securities Regulatory Commission, marking the first step toward a public listing that would allow Kunlunxin to operate as a standalone entity while remaining a 59 % subsidiary of Baidu.
Kunlunxin, which designs chips for data‑center servers, has been a key driver of Baidu’s AI‑cloud growth. Analysts estimate the unit’s valuation at no less than $3 billion, and it has already generated a significant portion of Baidu’s AI‑chip revenue. The company’s product roadmap includes the inference‑focused M100 chip slated for early 2026 and the training‑and‑inference M300 expected in early 2027, building on its current P800 platform. The spin‑off is intended to unlock value for both entities, giving Kunlunxin access to dedicated capital markets and allowing Baidu to focus on its broader AI‑cloud strategy.
The move aligns with China’s broader semiconductor push, which seeks to reduce reliance on foreign technology amid U.S. export controls. By separating the chip unit, Baidu can attract investors specifically interested in AI hardware, while Kunlunxin can pursue its own financing and strategic partnerships. Management emphasized that the split would “align incentives and accelerate growth” for the chip business, a sentiment echoed by CEO Robin Li, who highlighted the company’s transition to an AI‑first model and the importance of dedicated resources for hardware innovation.
Regulatory approval will be required from both the HKEX and the CSRC. The Hong Kong listing process typically involves a confidential application, a review by the Listing Department, and final approval, which can take several months. The CSRC’s registration‑based IPO system adds an additional layer of scrutiny, and the timeline for final clearance is uncertain but could extend beyond a year. Baidu’s filing indicates that the company is prepared for a rigorous approval process and has positioned Kunlunxin for a potentially high‑profile public debut.
The announcement was welcomed by investors, reflecting confidence in Kunlunxin’s growth prospects and the strategic fit within Baidu’s AI ecosystem. Analysts noted that the spin‑off could enhance transparency for the chip unit, improve capital allocation, and support Baidu’s goal of becoming a full‑stack AI company. The move also signals to the market that Baidu is committed to building a domestic AI‑chip champion capable of competing with global players such as Nvidia, Huawei, and Cambricon.
Baidu’s Q1 2025 earnings showed a 3 % revenue increase to RMB 32.5 billion, driven largely by a 42 % jump in AI‑cloud revenue. The company’s core business grew 7 % to RMB 25.5 billion, while net income rose 42 % to RMB 7.7 billion. The spin‑off is expected to complement this momentum by providing Kunlunxin with the resources to scale its chip production and accelerate product launches, thereby supporting Baidu’s broader AI strategy and reinforcing its position in China’s rapidly expanding AI hardware market.
The decision to spin off Kunlunxin is a strategic pivot that could reshape Baidu’s capital structure and market focus. By creating a separate public entity, Baidu can unlock value for shareholders, attract specialized investors, and position Kunlunxin to compete more effectively in the global AI‑chip arena. The move also aligns with national policy objectives and signals Baidu’s commitment to advancing China’s semiconductor industry.
The spin‑off is a material event that will likely influence long‑term investment models, as it changes the way Baidu allocates capital and manages its AI‑chip business. Investors will need to reassess the valuation of both Baidu and Kunlunxin, and the regulatory timeline will be a key factor in determining the eventual market entry of the chip unit.
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