Baidu’s AI chip arm Kunlunxin secretly files for HK IPO

Kunlunxin, Baidu's artificial intelligence chip unit, has secretly filed for an initial public offering (IPO) in Hong Kong through its joint sponsors. 

In a regulatory filing, Baidu announced its intention to spin off Kunlunxin (Beijing) Technology as part of its plan to independently list the company's Series H shares on the Hong Kong Stock Exchange (HKEX).

According to the document, Baidu said the proposed spin-off is expected to better reflect the value of the Kunlunxin Group on its own merits and increase its operational and financial transparency, through which investors would be able to appraise and assess the performance and potential of the Kunlunxin Group separately and distinctly from those of the retained group.

It also said the business of the Kunlunxin Group has a size sufficient to pursue a listing status and the proposed spin-off aims to enhance Kunlunxin’s profile among its customers, suppliers, and potential strategic partners and its position to negotiate and solicit more business. This will enable Kunlunxin to directly and independently access both equity and debt capital markets in the future should the need arise, which allows a more efficient deployment of financial resources of the company. 

Kunlunxin’s business would be appealing to an investor base that specialised in the business of general-purpose AI computing chips and related software-hardware systems, which is different from the relatively more diverse business model of the retained group’s operations.

The proposed spin-off is contingent upon several conditions, including securing approval from the listing committee of the HKEX for the listing and trading of Kunlunxin shares, completing the necessary filing with the China Securities Regulatory Commission for the listing and offering, and the final decisions made by both the company and Kunlunxin.

Following completion of the proposed spin-off, Kunlunxin is expected to remain as a subsidiary of Baidu.

Notably, the move underscores China's strategic push to develop domestic semiconductor capabilities, accelerated by the tightening of US export controls on advanced chip technology. This trend is reflected in the growing roster of Chinese AI chipmakers seeking public listings.

Originally established in 2012 as an in-house unit to develop AI chips for Baidu's, Kunlunxin has evolved into an independently operated entity, although Baidu retains a controlling stake.

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