TL;DR
Baidu’s Kunlunxin is targeting a $50 billion initial public offering in Hong Kong and has asked investors to commit to buying its chips, blurring the line between shareholder and customer.
Baidu’s AI chip unit Kunlunxin plans 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 potential 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 (approximately $12.8 billion) figure cited by TrendForce 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 that the Bank for International Settlements warned about this weekend. The BIS pointed to deals in which chipmakers acquire stakes in artificial intelligence laboratories that then commit to buying their products, calling the terms “usually poorly disclosed.“
Kunlunxin confidentially filed for a listing in Hong Kong in January and is also seeking a dual listing on Shanghai’s STAR market. It has named CICC, Citic Securities and Huatai Securities as lead banks. The company was founded in 2012 as Baidu’s internal chip division and is central to the search giant’s ambition to become a full-fledged AI company. Hong Kong has become the main listing location for Chinese AI companieswith 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 comes amid a broader AI-powered 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 an IPO. SK Hynix has filed for a US stock listing that could raise $29 billion.
Kunlunxin has transformed from an internal Baidu supplier to a third-party chip vendor. Third-party customers accounted for more than 50% of revenue in 2025 and the company was expected to break even that year. The BIS warned this weekend that the financial structures of the AI ​​investment boom carry systemic risks, and that a chip company asking its IPO investors to also become its customers is precisely the kind of entanglement that regulators are pointing out.
