Valuation of 340 billion: Li Yanhong's largest IPO, Kunlun Core shares are hard to come by.

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

"Can't grab the shares."

This scene is playing out at Kunlun Core. Since filing confidentially with the Hong Kong Stock Exchange earlier this year, Kunlun Core's IPO has been drawing closer. Now is the critical phase of vying for cornerstone allocations.

With that, Robin Li's biggest IPO emerges—According to foreign media reports, Kunlun Core's target valuation is around USD 50 billion (approximately RMB 340 billion). If it goes public, its market cap will exceed that of Baidu. With such scale, it's no wonder Kunlun Core is often viewed externally as the most valuable asset in Baidu's AI narrative.

This battle for Baidu's turnaround will soon see a verdict.

Robin Li's Biggest IPO: Will Surpass Baidu

Right now, the sentiment is thick.

Going back to earlier this year, Baidu announced in a statement—Kunlun Core has submitted an application form (A1 Form) to the Hong Kong Stock Exchange via its joint sponsors in a confidential manner, seeking approval for the listing and trading of Kunlun Core shares on the Main Board of Hong Kong Stock Exchange.

Since then, Kunlun Core's Hong Kong IPO has been moving forward under the surface. Now, half a year later, as IPO preparations continue, Kunlun Core 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 Core through the primary market, but the threshold is high: Reports say Kunlun Core prioritizes investors who commit to purchasing chips when allocating shares, requiring the value of chips purchased to be 3 to 7 times the subscription amount.

This means investors who want to secure a cornerstone allocation from Kunlun Core must first "allocate goods." As a result, purely financial investors might be shut out. Kunlun Core prefers industrial investors who inherently have the ability to make ongoing purchases.

Only a few will ultimately make it to the table. One investor told Investment World, "Competition for cornerstone shares is fierce," while more people find it "extremely hard to get a seat."

Undoubtedly, external expectations for Kunlun Core are high. It is reported that Kunlun Core's target valuation is around USD 50 billion (approximately RMB 340 billion). This is not baseless—According to IDC data, in the 2025 Chinese AI accelerator server market, Kunlun Core and Cambricon are tied for third place among domestic manufacturers, each shipping about 116k cards.

Earlier, Goldman Sachs research noted that if the market gives Kunlun Core a valuation multiple similar to Cambricon, the value of Baidu's stake could be as high as USD 22 billion. And with the explosive demand for AI computing power, Cambricon's market cap briefly exceeded one trillion yuan this week.

Hence the fierce competition for Kunlun Core's cornerstone shares.

Of course, Baidu will be the biggest winner. I recall that at the beginning of the year, Robin Li explained in the announcement that one of the benefits of spinning off Kunlun Core for a separate listing is to enhance Kunlun Core's image among its customers, suppliers, and potential strategic partners, thereby gaining more business, and Baidu will benefit from its growth through its shareholding.

The effect was immediate. After the news broke, Baidu rose for four consecutive trading days, with its Hong Kong-listed stock market cap exceeding HKD 300 billion. If Kunlun Core achieves its target valuation of USD 50 billion, as its controlling shareholder, Baidu's stake value will exceed one hundred billion. Thus, Robin Li will usher in another highlight moment—Kunlun Core's market cap will surpass Baidu's.

Investors Gather: Waiting for a Super Return

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

The story of Kunlun Core can be traced back to 2011, when its predecessor was Baidu's Smart Chip and Architecture Department. A team from top companies including 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 Core (Beijing) Technology Co., Ltd. Alongside the spin-off came a lavish funding round, led by CPE Yuanfeng, with investors including IDG Capital, Junlian Capital, and Yuanhe Puhua, at a valuation of around RMB 13 billion.

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

However, this was also the only publicly announced financing for Kunlun Core. But according to Qichacha, Kunlun Core has undergone multiple equity changes over five years, with many well-known investment institutions joining the table one after another—In July 2022, new shareholders included General Technology Venture Capital, China-Belgium Fund, Qianshan Capital, etc.; just half a month later, CITIC Securities and Linxin Investment also became shareholders.

In 2023, BYD, Zhongguancun Science City Company, Sanya Yuhai Fund, China Internet Investment Fund, etc., appeared one by one; thereafter, there was no shortage of faces such as the Social Security Fund Zhongguancun Independent Innovation Special Fund, Beijing Artificial Intelligence Industry Investment Fund, Shunxi Fund, CSC Financial Capital, etc., making the lineup increasingly lavish.

Perhaps the listing move was already brewing; last July, Kunlun Core added 15 new shareholders at once, including a fund under China Mobile, Beijing Government Guidance Fund, Beijing Shangao Juntai Fund, China Sea Innovation Capital, CICC Capital, etc., with a competitive overtone that invites imagination.

As of today, Kunlun Core has gathered 57 shareholders in total. It is foreseeable that with Kunlun Core's listing, another collective wealth creation wave will be created on the Hong Kong stock market.

Backed by resources from a major tech company, Kunlun Core is no longer negligible. Currently, Kunlun Core's main product is the P800, launched in 2024, comparable to NVIDIA's A800, manufactured on Samsung's 7nm process, primarily targeting data center inference scenarios. Additionally, the Kunlun Core M100, optimized mainly for large-scale inference scenarios, will be launched in early 2026. The Kunlun Core M300, mainly targeting ultra-large-scale multimodal model training and inference scenarios, is planned for launch in 2027.

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

Our child is growing up; Kunlun Core is stepping out from under Baidu's wing. At a recent Ziyuan Conference, Qi Wei, Vice President of R&D at Kunlun Core, revealed that besides supplying chips to Baidu, the company's commercial scale for external customers continues to expand, and the proportion of external business has now exceeded that of internal supply to Baidu.

"Early to Rise, Late to Market": A Battle for a Comeback

Robin Li has waited a long time for this day.

Speaking of it, Baidu was the first internet company to shout "All in AI." During the hundred-model war, Baidu's Ernie Bot debuted early, becoming one of the earliest ChatGPT-like products in China, and was once immensely popular.

But reality is harsh.

After years of waves sifting through, the landscape of domestic large models is set—On one side, products like Doubao and Qianwen from major tech companies are gradually capturing users' minds; on the other side, AI newcomers have also caught up from behind. Last week, Zhipu's market cap briefly exceeded one trillion yuan. Although it has since retreated, it is still nearly three times that of Baidu.

Not to mention, DeepSeek's post-money valuation in its first financing round is close to RMB 400 billion; Kimi's valuation has also risen to USD 31.5 billion (approximately RMB 210 billion) in the latest funding round. In contrast, Baidu has repeatedly left the impression of "getting up early but arriving late to the market."

Given this situation, Baidu can hardly avoid anxiety.

Now is precisely the opportunity Baidu cannot afford to miss. Moreshine Technology and Muxi have already set examples in the secondary market; Cambricon also hit a record high market cap; even more anticipated is Changxin Technology, which has successfully passed its IPO review on the STAR Market... It is visible that the explosive growth of AI computing power is transmitting throughout the entire semiconductor industry chain.

And in Baidu's AI story, Kunlun Core is precisely regarded as the most valuable underlying asset. In early May, Kunlun Core officially started its STAR Market IPO coaching, simultaneously advancing an "A+H" dual listing. Facing a fleeting window of opportunity, Baidu is desperately racing against time.

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

If it misses again, it will truly fall behind for good.

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