Baidu’s Kunlunxin Targets $50 Billion Hong Kong IPO, Seeks Chip Buyers
▼ Summary
– Baidu’s AI chip unit Kunlunxin is planning a Hong Kong IPO at a $50 billion valuation, up from a recent $14.7 billion figure, and asked prospective investors to commit to buying its chips.
– The practice of tying chip purchase commitments to IPO allocation blurs the line between investor and customer, echoing “circular financing” structures that the Bank for International Settlements warned about.
– Kunlunxin filed confidentially for a Hong Kong listing in January, is pursuing a dual listing on Shanghai’s STAR Market, and has appointed CICC, Citic Securities, and Huatai Securities as lead banks.
– The company shifted from an internal Baidu supplier to a third-party chip seller, with external customers accounting for over 50% of revenue in 2025 and expected to reach breakeven that year.
– The listing occurs amid a broader AI-driven fundraising boom in Hong Kong, with nearly $44 billion raised in the first half of 2026, the highest in five years.
Baidu’s AI chip subsidiary, Kunlunxin, is reportedly preparing for a Hong Kong IPO with a staggering target valuation of $50 billion, according to The Information. What makes this listing particularly unusual is the company’s reported request that prospective investors also commit to purchasing its semiconductors, effectively merging the roles of shareholder and customer.
Reuters has not independently verified these claims, but the valuation figure alone marks a sharp escalation. Just this month, the South China Morning Post reported Kunlunxin was seeking a $14.7 billion valuation, while TrendForce cited a figure of roughly HK$100 billion (about $12.8 billion) in May. The new target represents a more than threefold increase in just a few months.
If confirmed, the practice of tying chip purchase commitments to IPO allocations would blur the traditional boundaries between investor and customer. This structure closely mirrors the “circular financing” arrangements the Bank for International Settlements (BIS) warned about over the weekend. The BIS specifically flagged cases where chipmakers take equity stakes in AI labs that then commit to buying their products, describing such terms as “typically poorly disclosed.”
Kunlunxin filed confidentially for a Hong Kong listing in January and is also pursuing a dual listing on Shanghai’s STAR Market. The company has appointed CICC, Citic Securities, and Huatai Securities as lead banks. Originally founded in 2012 as Baidu’s internal chip division, Kunlunxin is now central to the search giant’s ambition to become a full-stack AI company. Hong Kong has emerged as the primary listing venue for Chinese AI firms, raising nearly $44 billion in equity capital markets in the first half of 2026, the highest level in five years.
The listing comes amid a broader AI-driven fundraising boom in the city. CATL recently completed a multibillion-dollar offering, AI developer Zhipu is preparing another round after its January IPO, and optical transceiver maker Zhongji Innolight is also planning a listing. Meanwhile, SK Hynix has filed for a US listing that could raise $29 billion.
Kunlunxin has been transitioning from an internal Baidu supplier to a third-party chip seller. External customers accounted for over 50% of revenue in 2025, and the company was expected to reach breakeven that same year. However, the BIS warned this weekend that the financial structures behind the AI investment boom carry systemic risks. A chip company asking its IPO investors to also become its customers is exactly the kind of entanglement regulators are now flagging.
(Source: The Next Web)
