Baidu, a Chinese technology company, has initiated plans to spin off its artificial intelligence (AI) chip subsidiary, Kunlunxin, for a listing on the Hong Kong Stock Exchange. This action aligns with a broader trend among domestic chipmakers seeking capital, supported by Beijing's focus on semiconductor self-sufficiency.
On Friday, Baidu publicly announced the confidential submission of a listing application to the Hong Kong Stock Exchange. Specific details regarding the offering's size and structure have not yet been determined. The proposed spin-off is subject to regulatory approvals, including clearance from China's securities watchdog. Baidu has stated there is no assurance that the spin-off will proceed as planned. Reports indicate Baidu holds approximately 59% ownership in Kunlunxin.
Baidu operates as a prominent entity within China's AI sector. The company procures specialized AI chips for its data center and cloud computing operations, and through Kunlunxin, it also designs these components.
The company articulated that the spin-off supports its strategic objectives to underscore Kunlunxin's independent potential, attract specialized investors, and broaden its financing avenues. It confirmed that Kunlunxin would maintain its status as a Baidu subsidiary following the potential listing.
This development occurs amidst increasing technological competition between the United States and China. Both nations have implemented various restrictions impacting Chinese AI companies' access to advanced AI chips, such as those produced by Nvidia. Concurrently, China's government has intensified efforts to promote domestic chip procurement and has allocated substantial public funding towards indigenous semiconductor development. Recent months have seen other Chinese chipmakers, including Moore Threads and Biren Technology, announce intentions for public listings.