Stock of Baidu (BIDU): A Chinese AI Chip Manufacturer Files for an IPO as Nvidia Encounters Restrictions

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TLDR

  • Baidu’s AI chip division Kunlunxin filed to list on the Hong Kong Stock Exchange on January 1, 2026.
  • Jefferies analysts project Kunlunxin’s valuation may range from $16 billion to $23 billion.
  • Baidu’s stock rose 9.7% in premarket trading after the IPO filing announcement.
  • Chinese AI chip manufacturers are making progress as Nvidia encounters restrictions on selling high-end chips to China.
  • Fellow Chinese AI chipmaker Shanghai Biren Technology saw a 76% jump on its Hong Kong trading debut the same day.

Baidu’s stock jumped in early Friday trading after the Chinese tech firm revealed its AI chip division is planning an initial public offering. This step allows Kunlunxin to take advantage of investor interest in domestic AI technology.

BIDU Stock Card

The company submitted Kunlunxin’s listing application to the Hong Kong Stock Exchange on January 1. Baidu’s American depositary receipts increased by 9.7% in premarket trading, while its Hong Kong-listed shares gained 9.4% on Friday.

Per The Wall Street Journal, Jefferies analysts estimate Kunlunxin’s potential valuation at between $16 billion and $23 billion. Baidu did not reveal the size of the offering in its Friday filing.

Established in 2012, Kunlunxin develops AI chips to support Baidu’s ecosystem and compete in the rapidly expanding semiconductor industry. Baidu currently holds approximately 59% of the unit.

The company stated that the spinoff intends to highlight Kunlunxin’s value independently and draw investors interested in AI chips. The listing will help broaden financing avenues and enhance management accountability.

Kunlunxin will continue to be a Baidu subsidiary post-IPO. The transaction still needs regulatory approval from China’s securities regulator.

Strong Debut for Chinese AI Chipmakers

The timing appears favorable for Kunlunxin given recent market performance. Shanghai Biren Technology surged 76% on its Hong Kong trading debut Friday.

Biren raised HK$5.37 billion (equivalent to $690.4 million) through its IPO. Shares, priced at HK$19.60 each, closed the day at HK$34.46.

Chinese chipmakers including Kunlunxin, Biren, Huawei Technologies, Cambricon Technologies, and Moore Threads are striving to gain market share. They are making headway as Nvidia faces limitations on selling its top-tier chips to China.

Nvidia CEO Jensen Huang has described China as a $50 billion market for AI infrastructure, growing at 50% per year. He has advocated for permission to sell chips to Chinese customers, claiming this would foster dependence on U.S. hardware.

Beijing has pushed back by discouraging Chinese firms from purchasing Nvidia chips. Former President Donald Trump stated last month he would permit shipments of Nvidia’s H200 chips to China if the company gives 25% of sales to the U.S. government. Chinese regulators have not indicated whether they will approve such sales.

Nvidia’s Performance Edge Creates Competition

According to the Institute for Progress think tank, the H200 chip is about 32% more powerful in processing than Chinese-made chips like the Huawei Ascend 910C. This performance gap could harm Kunlunxin and other domestic chipmakers if Nvidia receives approval to sell in China.

Even with approval, Nvidia may struggle to fulfill demand. The company has orders for more than 2 million H200 chips from China, worth approximately $54 billion. However, it only has a stockpile of 700,000 processors, per Reuters.

Kunlunxin has assisted Baidu in lowering its dependence on Nvidia chips for data centers powering its Ernie AI models. The division now operates more autonomously and sells to third-party clients outside of Baidu.

Baidu is counting on generative AI to fuel its future growth. The company faces pressure from advancing open-source models such as DeepSeek and new AI-focused applications vying for market share.

Wall Street holds a Strong Buy consensus on Baidu’s stock, based on 12 Buy ratings and two Hold ratings. The average price target of $156.12 indicates a 20% upside potential.

Baidu did not respond to requests for comment, and Nvidia also failed to reply to a comment request.