Original title: Li Yanhong's Biggest IPO is Coming
Original author: Wu Qiong, Investment Community
'The allocation shares are hard to get.'
This scene is playing out around Kunlunxin. Since it confidentially submitted its listing application to the Hong Kong Stock Exchange earlier this year, Kunlunxin's IPO has drawn closer. It is now the stage of competing for cornerstone shares.
Thus, Li Yanhong's biggest IPO emerges — according to foreign media reports, Kunlunxin is targeting a valuation of about USD 50 billion (approximately RMB 340 billion). If listed, its market capitalization would surpass that of Baidu. Such a size is why Kunlunxin is often viewed by the outside world as Baidu's most valuable asset in its AI story.
The outcome of Baidu's comeback battle will soon be revealed.
Li Yanhong's Biggest IPO: To Surpass Baidu
The mood is intense right now.
Rewinding to the beginning of this year, Baidu announced in a filing — Kunlunxin has confidentially submitted an A1 listing application form to The Stock Exchange of Hong Kong Limited through its joint sponsors, seeking approval for the listing and trading of Kunlunxin shares on the Main Board of the Hong Kong Stock Exchange.
Since then, Kunlunxin's Hong Kong IPO activities have proceeded under the radar. Now, half a year later, as IPO preparations continue, Kunlunxin has entered a critical pre-listing stage. According to The Information, the company has already engaged with potential investment institutions.
This is the final window for investors to enter Kunlunxin through the primary market, but the threshold is not low: the report states that Kunlunxin prioritizes investors in the placement who commit to chip purchases, requiring the value of chips purchased to be 3 to 7 times the subscription amount.
This means that if investors want to secure Kunlunxin's cornerstone shares, they must 'allocate purchases' first. As a result, pure financial investors might be excluded. Kunlunxin prefers industrial investors with inherent and sustained purchasing capabilities.
Ultimately, only a few make it to the table. An investor told Investment Community that 'competition for cornerstone shares is fierce', and more people are finding 'a seat is hard to come by'.
Undoubtedly, high hopes are placed on Kunlunxin. It is reported that Kunlunxin is targeting a valuation of about USD 50 billion (approximately RMB 340 billion). This is not groundless. According to IDC data, in the 2025 Chinese AI accelerator server market, Kunlunxin and Cambricon tied for third place among domestic manufacturers, each shipping about 116,000 cards.
Previously, a Goldman Sachs research report pointed out that if the market grants Kunlunxin a valuation multiple similar to Cambricon's, the value of Baidu's stake could reach as high as USD 22 billion. With the current explosive demand for AI computing power, Cambricon's market capitalization exceeded one trillion yuan this week at one point.
Hence, the fierce competition for Kunlunxin's cornerstone shares.
Of course, Baidu will be the biggest winner. Recalling Li Yanhong's explanation in the announcement earlier this year about the benefits of spinning off Kunlunxin for listing, one was to enhance Kunlunxin's image among its customers, suppliers, and potential strategic partners to win more business, and Baidu would benefit from its growth through its shareholding.
The effect is immediate. Following this news, Baidu's stock rose for four consecutive trading days, with its latest Hong Kong stock market capitalization exceeding HKD 300 billion. If Kunlunxin achieves its target valuation of USD 50 billion, as the controlling shareholder, Baidu's stake would be worth over a hundred billion. Thus, Li Yanhong is about to have another shining moment — Kunlunxin's market capitalization will surpass Baidu's.
Gathering of Investors: Awaiting a Super Return
Secretive, low-key, yet it has become Li Yanhong's proud achievement.
The story of Kunlunxin dates back to 2011, when its predecessor was Baidu's Intelligent Chip and Architecture Department. A team from leading companies like Baidu, Qualcomm, Marvell, and Tesla embarked on Baidu's chip-making journey.
It wasn't until 2021 that Baidu officially spun off its Kunlun chip business and established a new company — Kunlunxin (Beijing) Technology Co., Ltd. Along with independence came a star-studded funding round, led by CPE Capital, with investors including IDG Capital, Legend Capital, Yuanhe Puhua, etc., valuing the company at about RMB 13 billion at the time.
From then on, Kunlunxin became known to the outside world.
However, this was also the only time Kunlunxin publicly announced financing. But according to Qichacha, Kunlunxin completed multiple equity changes over five years, with many well-known investment institutions joining the table one after another — in July 2022, new shareholders such as General Technology Venture Capital, Sino-Belgian Fund, and Qianshan Capital were added; just half a month later, CITIC Securities and Linxin Investment also became shareholders of Kunlunxin.
In 2023, BYD, Zhongguancun Science City Company, Sanya Yuhai Fund, China Internet Investment Fund, and others appeared one by one; later, there were also faces like the Social Security Fund Zhongguancun Independent Innovation Special Fund, Beijing Artificial Intelligence Industry Investment Fund, Shunxi Fund, and CITIC Construction Investment Capital, making the lineup increasingly luxurious.
Perhaps the listing move was brewing long ago. In July last year, Kunlunxin added 15 shareholders at once, including funds under China Mobile, Beijing government guidance funds, Beijing Shangao Juntao Fund, Guohai Innovation Capital, CICC Capital, etc., sparking imagination with the sense of competition.
To date, Kunlunxin has gathered a total of 57 shareholders. It is foreseeable that Kunlunxin's listing will create another collective wealth-making wave in the Hong Kong stock market.
Backed by the resources of a major tech company, Kunlunxin is already a force to be reckoned with. Currently, Kunlunxin's main product is the P800, launched in 2024, positioned against NVIDIA's A800, using Samsung's 7nm process, primarily targeting data center inference scenarios. Additionally, the Kunlunxin M100, optimized mainly for large-scale inference scenarios, is set for launch in early 2026. The Kunlunxin M300 primarily targets ultra-large-scale multimodal model training and inference scenarios and is planned for launch in 2027.
Compared to peers, Kunlunxin not only has order support from internal business lines within the group like search, cloud computing, and autonomous driving; it also has large state-owned enterprise clients such as China Mobile, China Southern Power Grid, and China Merchants Bank. The most critical deal among these was in August last year when Kunlunxin ranked first in all three bid packages in China Mobile's centralized procurement project, securing a billion-level order.
As the child grows up, Kunlunxin is stepping out from under Baidu's wing. At the recent Zhisuan Conference, Qi Wei, Vice President of R&D at Kunlunxin, revealed that besides providing chips for Baidu, the company's commercialization scale for external customers continues to expand, and the proportion of external business now exceeds the supply to Baidu's internal use.
'Started Early but Arrived Late': The Comeback Battle
Li Yanhong has been waiting for this day for a long time.
In fact, Baidu was the first internet company to proclaim 'All in AI'. During the 'Hundred Models Battle', Baidu's ERNIE Bot made its debut, becoming one of the earliest domestic ChatGPT-like products, enjoying immense limelight for a time.
However, reality is harsh.
After years of sifting through the waves, the landscape of domestic large models is set — on one side, products like Doubao and Qwen from other major tech companies are gradually capturing user mindshare; on the other side, AI newcomers have also caught up from behind. Last week, Zhipu AI's market capitalization once 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 also rose to USD 31.5 billion (approximately RMB 210 billion) in a new funding round. In contrast, Baidu has repeatedly left the impression of 'starting early but arriving late'.
In this situation, it's hard for Baidu not to be anxious.
Now is an opportunity Baidu cannot afford to miss. Moore Threads, MetaX, and others have already set examples in the secondary market; Cambricon also hit a new market cap high; and the even more highly anticipated Changxin Technology has successfully passed its STAR Market IPO review... It is evident that the explosive growth of AI computing power is being transmitted throughout the semiconductor industry chain.
And in Baidu's AI narrative, Kunlunxin is precisely seen as the most valuable underlying asset. In early May, Kunlunxin officially started its IPO tutoring for the STAR Market, simultaneously advancing a dual-track 'A+H' IPO. Facing a fleeting window of opportunity, Baidu is desperately racing against time.
This reminds one of Li Yanhong's judgment ten years ago that the era of artificial intelligence was coming and would bring endless possibilities. 'For Baidu, if we can seize the opportunity of artificial intelligence, in five to ten years, Baidu can become a completely different company.'
If we miss it again, we will really fall behind completely.
