Kunlun Chip aims for Hong Kong IPO, seeking up to $2 billion in funding.

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As one of the few companies in China with the ability to design high-performance AI accelerators, Baidu’s AI chip division, Kunlun Chip, is accelerating its capital-raising process.

According to sources quoted by Bloomberg, Kunlun Chip has selected an investment banking team to prepare for its initial public offering (IPO) in Hong Kong, with a target fundraising scale of up to $2 billion. This move highlights the strong market interest in AI infrastructure and marks an acceleration of Chinese tech giants’ efforts toward independence in critical hardware sectors.

The sources told Bloomberg that Kunlun Chip has hired China International Capital Corporation Limited, CITIC Securities, and Huatai Securities as lead banks for the IPO. In addition, CSC International is also involved in the offering.

Regarding the above news, a Baidu spokesperson has not responded to requests for comment. CSC, CICC, and Huatai Securities also declined to comment, while CITIC Securities refused to comment.

On January 2nd of this year, Baidu officially confirmed that Kunlun Chip secretly filed for an IPO the previous week. Although specific details such as the offering size are still under discussion and may change depending on market conditions, sources indicated that the fundraising amount is expected to be between $1 billion and $2 billion.

This IPO comes as investor demand for the AI sector is surging. As China continues to promote technological self-reliance, AI companies, considered strategic industries, are flocking to list in Hong Kong to take advantage of capital market dividends. Recently, AI chip designer Shanghai Biren Technology soared 76% in its Hong Kong debut, while related companies that went public in mainland China late last year saw first-day gains even in the triple digits. These performances provide a positive valuation reference for Kunlun Chip’s IPO.

Scarce AI Computing Power Asset

Kunlun Chip’s main business involves providing core chip support for data center servers. According to Baidu’s public statements, Kunlun Chip is one of the few companies in China capable of designing high-performance accelerators, which are critical for maintaining and improving AI computing power.

After its confidential filing, Kunlun Chip’s formal listing process will become a key focus of the market. The application of its products in data center servers is directly linked to Baidu and potential customers’ construction of the computing base for training and inference of large AI models.

Performance Among Top Domestic Players, Second in Shipments in 2024

As a major shareholder, Baidu’s large-scale cluster deployment provides key support for Kunlun Chip, and Kunlun Chip has also made substantial progress in expanding external orders.

According to data disclosed by Kunlun Chip, the company has achieved large-scale deployment in key industries such as the internet, finance, energy, power, and telecommunications, and has delivered 32,000 domestic computing power clusters.

Kunlun Chip also won a server procurement order worth nearly 1 billion yuan from China Mobile, and China Merchants Bank is also one of its major clients.

According to Tencent Technology, research notes previously indicated that Kunlun Chip’s total revenue for 2025 is expected to be around 5 billion yuan, a significant increase from 2 billion yuan in 2024.

For comparison, leading domestic AI chip company Cambricon expects revenues of 2.881 billion yuan in the first half of 2025, and an annual total of 5 to 7 billion yuan. Newly-listed Moore Threads and Enflame Technology expect revenues for 2025 of 1.218 to 1.498 billion yuan and 1.5 to 1.98 billion yuan, respectively.

However, according to industry data cited in the same report, Kunlun Chip’s final annual revenue may fall short of this estimate, but will still be far higher than the 2 billion yuan of 2024. A source close to Kunlun Chip revealed:

Ranking among the top three domestically in terms of scale should not be a problem.

IDC data shows that Kunlun Chip’s shipments ranked second in the industry in 2024.

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