Baidu-Backed AI Chip Company Plans Dual Listing in Hong Kong and Shanghai

Baidu’s AI Chip Subsidiary Moves Toward Market Independence

Baidu’s long-nurtured AI chip business is taking a significant step toward full independence in the capital market. Kunlun Core, a semiconductor company under Baidu, officially announced on May 7, 2026, that it has begun preparing for a listing on the Science and Technology Innovation Board (STAR Market) in Shanghai. Earlier, in January 2026, the company had also submitted an application for listing on the Main Board of the Hong Kong Stock Exchange, pursuing a dual listing strategy, commonly referred to as “A+H.”

China International Capital Corporation (CICC) has been appointed as the preparatory institution for the listing. According to disclosed information, Kunlun Core’s largest shareholder is Baidu (China) Co., Ltd., holding a 57.67% stake. The Hong Kong Stock Exchange has already approved the business spin-off, and Kunlun Core is expected to remain a subsidiary of Baidu post-listing.

After a Decade of Internal Development, Kunlun Core Enters External Markets

Baidu’s foray into chip development was initially driven by a need to reduce AI computing costs and address potential future bottlenecks. Baidu’s founder, Robin Li, stated that the company ventured into chip development because external chips were prohibitively expensive, and in doing so, they significantly reduced costs.

Baidu launched its FPGA-based AI accelerator project in 2011, introduced the first-generation Kunlun chip in 2018, and began mass production in 2020. The long development timeline spanned nearly a decade from project inception to mass production. By April 2021, Kunlun Core was spun off from Baidu and completed its first independent funding round with a valuation of 13 billion yuan. Investors included CPE Yuanfeng, IDG Capital, Legend Capital, and Oriza Holdings.

For a long time, limited market opportunities before the AI large-model boom kept the company quiet. However, a turning point came in 2023 with the proliferation of large AI models, a surge in computing demand, and a supply crunch in NVIDIA GPUs.

Securing Major Orders from China Mobile, Demonstrating Independence

A landmark event for Kunlun Core was winning a major order from China Mobile in August 2025. The company secured top positions in all three bidding packages of China Mobile’s procurement project, winning contracts worth billions of yuan. China Mobile’s subsidiary, CMIWS, also joined Kunlun Core’s shareholder list. This order is seen as a symbolic milestone demonstrating Kunlun Core’s capability to secure external clients beyond Baidu’s internal demand.

By its Series D funding round in July 2025, Kunlun Core’s valuation reached 21 billion yuan, with 44 shareholders, including state-owned capital platforms, industry giants, and financial institutions.

Market Position: Avoiding Huawei, Competing with NVIDIA

According to IDC data, NVIDIA shipped 1.9 million units in China’s accelerated computing chip market in 2024, followed by Huawei Ascend with 640,000 units. Kunlun Core shipped 69,000 units, leading the second-tier domestic group ahead of TianShu Zhixin (38,000 units), Cambricon (26,000 units), and MooreThreads (24,000 units).

Kunlun Core’s product lineup focuses on AI inference chips, with relatively limited presence in training-related applications. Unlike Huawei Ascend, which excels in training, or Cambricon, which spans cloud, edge, and device markets, Kunlun Core has concentrated on the growing inference market driven by the expansion of AI model deployment.

Financially, Kunlun Core’s annual revenue in 2025 reportedly reached approximately 3.5 billion yuan, a significant jump from 2 billion yuan in 2024. Analysts predict revenue could grow to 6.5–8.3 billion yuan in 2026. However, audited financial data has yet to be released, and these figures require confirmation from official filings.

The Rationale Behind the Dual Listing Strategy

Kunlun Core’s decision to pursue listings in both Hong Kong and Shanghai reflects its aim to leverage distinct advantages from each market. The Hong Kong listing is intended to facilitate international fundraising, enhance brand recognition, and connect with global institutional investors. For AI chip companies, proving technological value to global investors is a critical process. Competitors like Biren Technology and TianShu Zhixin are also pursuing Hong Kong listings, making participation essential for competition.

Meanwhile, the STAR Market in Shanghai is known for its favorable stance toward hard-tech companies, often granting higher valuation premiums than the Hong Kong market. Domestic institutional investors also have a deeper understanding of narratives around “technological self-reliance.” For semiconductor development, which requires substantial funding, securing dual channels of capital is crucial to maintaining research and development momentum.

For Baidu, this structure is also logical. In recent years, Baidu’s valuation has been constrained by its label as an “internet company,” preventing the market from fully appreciating its AI investments. By spinning off Kunlun Core, the chip business can be independently valued in the capital market. Baidu, as the primary shareholder, will continue to benefit while shielding its financial statements from the ongoing losses associated with chip development. According to estimates by BOC International, Kunlun Core contributes approximately HKD 50 billion to Baidu’s valuation, accounting for about a quarter of its market capitalization.

Challenges: Moving Beyond a “Baidu-Exclusive Chip” and Building a Software Ecosystem

For years, the market perceived Kunlun Core as a “Baidu-specific chip” used primarily for training Baidu’s ERNIE large models or as an internal component of Baidu’s ecosystem. The capital market is likely to scrutinize the proportion of independent, non-Baidu customers and the revenue generated through market competition.

While the China Mobile order is a step toward demonstrating independence, one major client is not enough. Regulatory filings will need to provide more comprehensive data on customer diversity.

Another critical challenge lies in building a robust software ecosystem. NVIDIA’s competitive edge lies not just in its GPUs but also in its CUDA software platform. For domestic chips to gain market share, they must address the issue of migration costs for customers. Kunlun Core is said to offer strong compatibility with CUDA, but this claim will need to be substantiated with real-world customer use cases.

A Broader Push for Domestic AI Chip IPOs

Kunlun Core’s preparations for a STAR Market listing are part of a broader trend among Chinese AI chip makers rushing to the capital market. Companies like MooreThreads have already listed on the STAR Market, while Biren Technology has gone public in Hong Kong, Enflame is prepared for an IPO, and TianShu Zhixin is advancing toward a Hong Kong listing. These companies have collectively recognized the opening of market opportunities and funding channels around the same time.

Industry forecasts suggest that the revenue share of AI semiconductors within the overall semiconductor market will continue to grow, creating significant opportunities for domestic chipmakers to challenge the dominance of established players like NVIDIA.

For Kunlun Core, its IPO represents just the beginning. After securing capital, its long-term value will depend on whether it can adhere to its technical roadmap for next-generation chips and establish a fully independent commercial ecosystem from Baidu. Transitioning from “Baidu’s chip division” to “a truly independent chip company” is a journey more critical than the IPO process itself.