Kunlun Xin is sprinting for a Hong Kong IPO, aiming to raise up to $2 billion

As one of the few companies in China capable of designing high-performance AI accelerators, Baidu's AI chip division, Kunlun Core, is accelerating its capitalization process.

According to sources familiar with the matter, Kunlun Core has selected an investment banking team to prepare for an initial public offering (IPO) in Hong Kong, with a target fundraising scale of up to $2 billion. This move not only highlights the strong market interest in the field of artificial intelligence infrastructure but also marks the accelerating pace of independence for Chinese tech giants in key hardware areas.

Sources told Bloomberg that Kunlun Core has hired China International Capital Corporation, CITIC Securities, and Huatai Securities as lead banks for this IPO. Additionally, CITIC Securities International is also involved in related work for this issuance.

In response to the news, a Baidu spokesperson did not reply to requests for comments. CITIC Securities, China International Capital Corporation, and Huatai Securities also declined to comment, while CITIC Securities refused to provide any statements.

On January 2 of this year, Baidu officially confirmed that Kunlun Core had secretly submitted its IPO application the previous week. Although specific details such as the issuance scale are still under discussion and may change with market conditions, sources revealed that the fundraising amount is expected to be between $1 billion and $2 billion.

This IPO comes at a time when investor demand for the artificial intelligence sector is surging. As China continues to promote technological self-reliance, AI-related companies, regarded as strategic industries, are flocking to list in Hong Kong to take advantage of capital market benefits. Recently, AI chip design company Shanghai Birun Technology surged 76% in its debut on the Hong Kong stock market, while related companies that listed in mainland China at the end of last year saw first-day gains reaching triple digits, providing a positive valuation reference for Kunlun Core's listing.

Scarce AI Computing Power Target

Kunlun Core's main business involves providing core chip support for data center servers. According to Baidu's public statements, Kunlun Core is one of the few companies in China capable of designing high-performance accelerators, which are crucial for maintaining and enhancing artificial intelligence computing capabilities.

Following the secret submission of its application, Kunlun Core's formal listing process will become a focal point of market attention. Its products' application in data center servers is directly related to Baidu and potential customers' construction of computing power bases for AI large model training and inference.

Performance Scale Ranks Among Domestic Leaders, 2024 Shipment Volume Second

As a shareholder, Baidu's large-scale cluster deployment has provided critical support for Kunlun Core, while Kunlun Core has also made substantial progress in expanding external orders.

According to data disclosed by Kunlun Core, it has achieved large-scale deployment in key industries such as the internet, finance, energy, and telecommunications operators, currently establishing a 32,000-card domestic computing power cluster.

Kunlun Core has also won a nearly 1 billion yuan server procurement order from China Mobile, with China Merchants Bank being one of its major clients.

According to Tencent Technology reports, research minutes previously indicated that Kunlun Core's total revenue for 2025 is expected to be around 5 billion yuan, a significant increase from 2 billion yuan in 2024 In comparison, the leading domestic AI chip manufacturer, Cambricon, is expected to generate revenue of 2.881 billion yuan in the first half of 2025, with an annual forecast of 5 to 7 billion yuan. The newly listed companies Moore Threads and Muxi are projected to have annual revenues in 2025 ranging from 1.218 billion to 1.498 billion yuan, and from 1.5 billion to 1.98 billion yuan, respectively.

However, the report cites data obtained from the industry indicating that the final annual revenue may fall short of this expectation, although it will still far exceed the 2 billion yuan of 2024. The report quotes an insider close to Kunlun Core as saying:

It should not be a problem to rank among the top three in domestic market share.

IDC data shows that in 2024, Kunlun Core's shipment volume ranks second in the industry