TL;DR
Baidu’s Kunlunxin targets a $50B Hong Kong IPO and asked investors to commit to buying its chips, blurring the line between shareholder and customer.
Baidu’s AI chip unit Kunlunxin is planning to go public in Hong Kong at a target valuation of $50 billion, The Information reported on Sunday. In an unusual twist, the company asked prospective IPO investors to also commit to purchasing its semiconductors, according to the report.
Reuters could not independently verify the report. The $50 billion target represents a dramatic increase from the $14.7 billion valuation that the South China Morning Post reported Kunlunxin was seeking as recently as this month, and from the HK$100 billion (roughly $12.8 billion) figure TrendForce cited in May.
The practice of tying chip purchase commitments to IPO allocation, if confirmed, would blur the line between investor and customer in a way that echoes the “circular financing” structures the Bank for International Settlements warned about this weekend. The BIS flagged arrangements where chipmakers take stakes in AI labs that then commit to buying their products, calling the terms “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. It has appointed CICC, Citic Securities, and Huatai Securities as lead banks. The company was founded in 2012 as Baidu’s in-house chip division and is central to the search giant’s ambition to become a full-stack AI company. Hong Kong has become the primary listing venue for Chinese AI companies, with nearly $44 billion raised in equity capital markets in the first half of 2026, the highest level in five years.
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The listing lands amid a broader AI-driven fundraising boom in the city. CATL completed a multibillion-dollar offering, AI developer Zhipu is preparing another round after going public in January, and optical transceiver maker Zhongji Innolight is also planning a listing. SK Hynix has filed for a US listing that could raise $29 billion.
Kunlunxin has been shifting 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 year. The BIS warned this weekend that the AI investment boom’s financial structures carry systemic risks, and a chip company asking its IPO investors to also become its customers is precisely the kind of entanglement regulators are flagging.
