Baidu NASDAQ:BIDU shares listed in Hong Kong climbed about 5% on Monday after a media report indicated the company's artificial intelligence chip subsidiary, Kunlunxin, is pursuing a Hong Kong initial public offering that could value the business at roughly $50 billion.
The report said Kunlunxin has approached prospective investors and is seeking commitments tied not only to the planned share sale but also to future purchases of its AI chips.
The proposed arrangement could help support demand for the company's semiconductor products as it expands beyond its parent company's ecosystem.
Baidu disclosed earlier this year that Kunlunxin had confidentially submitted documents for a Hong Kong listing as part of a planned spin-off while Baidu intends to remain the controlling shareholder. The unit was established in 2011 to develop AI processors for internal use but has since broadened its customer base.
Kunlunxin now supplies chips to external clients, including Tencent (TCEHY), while ByteDance (BDNCE) has reportedly evaluated its products.
The potential listing comes as investor appetite for Chinese AI companies remains strong, with several technology startups pursuing public offerings amid growing interest in artificial intelligence infrastructure and computing hardware.