340 billion valuation: Li Yanhong's largest IPO, Kunlun Chip shares hard to come by

Original Title: "Robin Li's Biggest IPO Is Coming"
Original Author: Wu Qiong, Investment World

"Can't Get a Share."

This scene is happening at Kunlun Chip. Since submitting a confidential filing to the Hong Kong Stock Exchange at the beginning of the year, Kunlun Chip's listing is getting closer. Now is the stage of competing for cornerstone shares.

Thus, Robin Li's biggest IPO emerges—according to foreign media reports, Kunlun Chip's target valuation is about $50 billion (approximately 340 billion RMB). If listed, its market cap will exceed Baidu's. With such scale, it's no wonder Kunlun Chip is always seen by outsiders as the most valuable asset in Baidu's AI story.

This battle for Baidu's turnaround will soon see the outcome.

Robin Li's Biggest IPO: Will Surpass Baidu

At this moment, emotions are running high.

Time back to early this year, Baidu announced in a filing—Kunlun Chip has submitted a listing application form (A1 Form) to the Hong Kong Stock Exchange in a confidential manner through its joint sponsors, to apply for approval of the listing and trading of Kunlun Chip shares on the Main Board of the Hong Kong Stock Exchange.

Since then, Kunlun Chip's Hong Kong IPO actions have remained under the surface. Half a year has passed now, and as IPO preparations continue, Kunlun Chip has reached a critical stage before listing. According to The Information, the company has already begun contacting potential investment institutions.

This is the last window for investors to enter Kunlun Chip through the primary market, but the threshold is not low: Reports say that Kunlun Chip prioritizes investors who commit to purchasing chips during the placement, requiring the value of chips purchased to be 3 to 7 times the subscription amount.

This means that if investors want to get a cornerstone share of Kunlun Chip, they must first "allocate goods." As a result, purely financial investors may be shut out. Kunlun Chip prefers industrial investors who themselves have continuous purchasing power.

Only a few can ultimately make it to the table. One investor told Investment World, "The competition for cornerstone shares is fierce," with many more finding it "hard to get a seat."

Undoubtedly, the outside world has high hopes for Kunlun Chip. It is reported that Kunlun Chip's target valuation is about $50 billion (approximately 340 billion RMB). This is not unfounded. According to IDC data, in the 2025 China AI accelerator server market, Kunlun Chip and Cambricon tied for third place among domestic manufacturers, each shipping about 116k cards.

Earlier, Goldman Sachs research pointed out that if the market gives Kunlun Chip a valuation multiple similar to Cambricon, the value of Baidu's equity stake could be as high as $22 billion. And amid the explosive demand for AI computing power, Cambricon's market cap once exceeded one trillion RMB this week.

Hence, the fierce competition for Kunlun Chip's cornerstone shares.

Of course, Baidu will be the biggest winner. Recall that at the beginning of the year, Robin Li explained in the announcement one of the benefits of Kunlun Chip's spin-off listing: it would enhance Kunlun Chip's image among its customers, suppliers, and potential strategic partners to win more business, and Baidu would also benefit from its growth through shareholding.

The effect was immediate. After the news broke, Baidu rose for four consecutive trading days, with its Hong Kong market cap recently exceeding 300 billion HKD. If Kunlun Chip achieves its target valuation of $50 billion, as its controlling shareholder, Baidu's stake value will exceed 116k. Thus, Robin Li ushers in another highlight moment—Kunlun Chip's market cap will surpass Baidu's.

Investors Gather: Awaiting a Super Return

Secretive, low-key, yet it has become Robin Li's proud work.

The story of Kunlun Chip can be traced back to 2011, its predecessor being Baidu's Smart Chip and Architecture Department. A team from top companies like Baidu, Qualcomm, Marvell, and Tesla started Baidu's chip-making journey.

It wasn't until 2021 that Baidu formally spun off its Kunlun chip business and established a new company—Kunlun Chip (Beijing) Technology Co., Ltd. Along with the spin-off came a luxury financing round, led by CPE Yuanfeng, with investors including IDG Capital, Junlian Capital, and Yuanhe Puhua, at a valuation of about 13 billion RMB.

Since then, Kunlun Chip has become known to the outside world.

However, this is also the only time Kunlun Chip has publicly announced financing. But according to Qichacha, Kunlun Chip has completed several equity changes over five years, with many well-known investment institutions joining one after another—In July 2022, shareholders like General Technology Venture Capital, China-Belgium Fund, and Qianshan Capital were added; just half a month later, CITIC Securities and Linyi Investment also became shareholders.

In 2023, BYD, Zhongguancun Science City Company, Sanya Yuhai Fund, and China Internet Investment Fund appeared one after another; later, there were also faces like the Social Security Fund Zhongguancun Independent Innovation Special Fund, Beijing Artificial Intelligence Industry Investment Fund, Shunxi Fund, and CSC Capital, making the lineup increasingly luxurious.

Perhaps the listing move was brewing early on. In July last year, Kunlun Chip added 15 new shareholders at once, including funds under China Mobile, Beijing Government Guidance Fund, Beijing Shanguao Juntai Fund, China Sea Innovation Capital, and CICC Capital, with a competitive vibe that invites imagination.

To date, Kunlun Chip has gathered a total of 57 shareholders. It is foreseeable that with Kunlun Chip's listing, another wave of collective wealth creation will occur in Hong Kong stocks.

Backed by big company resources, Kunlun Chip is already not to be underestimated. Currently, Kunlun Chip's main product is the P800, launched in 2024, comparable to NVIDIA's A800, using Samsung's 7nm process, mainly for data center inference scenarios. Additionally, the Kunlun Chip M100, optimized mainly for large-scale inference scenarios, will be launched in early 2026. The Kunlun Chip M300, targeting ultra-large-scale multimodal model training and inference scenarios, is planned for launch in 2027.

Compared to peers, Kunlun Chip not only has order support from internal Baidu business lines like search, cloud computing, and autonomous driving, but also large state-owned enterprise customers such as China Mobile, China Southern Power Grid, and China Merchants Bank. Among them, the most critical order was in August last year, when Kunlun Chip ranked first in all three bid packages in China Mobile's centralized procurement project, securing a billion-level order.

Like a fledgling leaving the nest, Kunlun Chip is stepping out from Baidu's shelter. At the recent Zhiyuan Conference, Qi Wei, Vice President of R&D at Kunlun Chip, revealed that besides providing chips to Baidu, the company's commercialization scale for external customers continues to expand, and the proportion of external business has already exceeded its supply to Baidu.

"Early to Rise, Late to the Party": A Turnaround Battle

This day, Robin Li has waited a long time.

Speaking of which, Baidu was the first internet company to shout "All in AI." During the hundred-model war, Baidu's ERNIE Bot was one of the earliest ChatGPT-like products in China, enjoying a moment of glory.

But reality is harsh.

After years of market screening, the landscape of domestic large models has been set—on one side, products like Doubao and Qianwen from other big companies have gradually captured users' minds; on the other side, AI newcomers have also caught up from behind. Last week, Zhipu AI's market cap once exceeded one trillion RMB. Although it has since retreated, it is still nearly three times Baidu's value.

Not to mention, DeepSeek's post-investment valuation after its first round of financing is close to 400 billion RMB; Kimi's valuation has also risen to $31.5 billion (approximately 210 billion RMB) in its latest financing round. In contrast, Baidu has repeatedly left the impression of "early to rise, late to the party" on the outside world.

In this context, it's hard for Baidu not to be anxious.

Now is an opportunity Baidu cannot afford to miss. Moore Threads, Muxi, etc., have set examples in the secondary market; Cambricon also hit a new market cap high; and even more anticipated is Changxin Technology, whose IPO on the STAR Market has successfully passed the review... It's visible that the explosive growth of AI computing power is transmitting throughout the entire semiconductor supply chain.

In Baidu's AI story, Kunlun Chip is precisely seen as the most valuable underlying asset. In early May, Kunlun Chip officially initiated its STAR Market IPO tutoring, simultaneously advancing an "A+H" dual listing. Facing a fleeting window period, Baidu is desperately racing against time.

This reminds one that ten years ago, Robin Li had already judged that the era of artificial intelligence was coming and would bring endless possibilities. "For Baidu, if we can seize the opportunity of AI, in five to ten years, Baidu can become a completely different company."

If they miss it again, they will truly fall behind for good.

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