Baidu NASDAQ:BIDU shares rose about 7% in Hong Kong on Monday after a report said its AI chip unit Kunlunxin is targeting a Hong Kong IPO at a valuation of about $50 billion.
According to The Information, Kunlunxin is seeking that valuation for its planned listing and has asked prospective investors to commit to buying its AI chips at levels equal to 3 to 7 times their intended IPO share subscriptions.
Baidu disclosed in January that Kunlunxin had confidentially filed for a Hong Kong listing as part of a planned spin-off. Baidu is expected to retain a controlling stake after the deal. Kunlunxin began in 2011 as Baidu's internal AI chip unit but has since expanded to external customers, including Tencent, while ByteDance has reportedly explored using its chips.
the potential listing could unlock value inside Baidu's AI portfolio at a time when Chinese AI names are drawing strong IPO demand. The next thing to watch is whether Kunlunxin can secure enough customer commitments to support the $50 billion valuation.