Kunlunxin is not yet publicly listed, and its valuation is nearly twice that of Baidu.

It is rumored that Kunlunxin is seeking a $500 billion IPO valuation, far exceeding the market value of its parent company Baidu.

Recent rumors claim that the IPO timeline of Kunlunxin may be postponed. Baidu responded with eight words: the relevant market rumors are not true. As for the specific listing time, the company stated that Kunlunxin is in the confidential application stage, and cannot disclose the progress of the listing process in accordance with regulatory requirements, and will make a public announcement in due course in the future.

Everything is normal, but nothing can be disclosed.

This is not the first time such a statement has been used. What is worth pondering is not the exact listing date, but the price the market has tagged this unlisted chip company with: a target valuation of 500 billion US dollars. In comparison, the closing market value of Baidu Group on that day was 204.197 billion Hong Kong dollars, equivalent to about 26.2 billion US dollars. The valuation of this subsidiary is almost twice that of its parent company.

01. Who is Kunlunxin: From a Baidu Cost-Saving Project to the Joint Third Place in Domestic Computing Power

Kunlunxin is not a grassroots startup, but a chip business incubated within Baidu for more than a decade.

In 2011, the computing power costs of Baidu's search, advertising and recommendation systems kept rising, and the internal team launched the FPGA AI accelerator project, believing that self-developed chips would be more cost-effective than purchased ones. Thus, in 2018, the first-generation self-developed AI chip "Kunlun" was unveiled to the public, and it entered mass production in early 2020, with more than 20,000 units deployed soon after. In August 2021, the second-generation chip was launched, covering full scenarios from training to inference, supporting algorithms including NLP, computer vision and speech; by the end of 2022, tens of thousands of units of the second-generation chip had been shipped, generating 100 million-level commercial revenue.

April 2021 was a watershed moment. Baidu divested its entire smart chip business, spun off Kunlunxin as an independent company, and appointed Ouyang Jian, Baidu's chief chip architect, as CEO. The company was valued at about 13 billion RMB in its first round of financing. From then on, it was no longer an internal department, but a chip company that needed to raise funds and find customers on its own.

The independent Kunlunxin caught the wind of domestic computing power substitution. In 2024, the third-generation chip P800 entered mass production; in 2025, it developed China's first self-developed AI cluster with 32,000 cards, the P800 completed large-scale verification, delivered multiple 10,000-card clusters in that year, and completed the training of the important ERNIE 5.1 version on a fully domestic cluster. In July of the same year, it completed Series D financing, raising about 283 million US dollars, with a post-investment valuation of about 21 billion RMB. China Mobile and Innovation, BYD, and Cinda Hong Kong joined its shareholder list; one month later, Kunlunxin won the bid for China Mobile's 2025-2026 AI inference server centralized procurement, with an order size of billions of RMB, and Tencent also became its customer.

Kunlunxin's position in the whole industry is: according to statistics from IDC (International Data Corporation), in terms of the shipment volume of domestic AI accelerator cards in 2025, Huawei Ascend ranked first with about 812,000 units, Alibaba T-Head followed with about 265,000 units, and Kunlunxin shipped about 116,000 units, tying for the third place with Cambricon.

However, this "joint third place" has a special feature: its books and customer list have never really separated from Baidu. The counseling and filing report in May shows that the controlling shareholder of Kunlunxin is Baidu (China) Co., Ltd., holding 57.67% of the shares; Baidu Group's financial reports have never disclosed Kunlunxin as a separate item, and its revenue is "mainly reflected in Baidu's AI infrastructure, chip sales and cloud services". In the early stage of independence, more than 90% of Kunlunxin's revenue came from internal procurement by Baidu; even today, its on-hand orders mainly come from Baidu's self-use, China Mobile, Geely, China Southern Power Grid and China Merchants Bank. The title of the "third pole" of domestic computing power is half supported by orders from its parent company.

02. Three Valuations and an Increasingly Undervalued Parent Company

Kunlunxin has been tagged with at least three different valuations in the market.

The one from the primary market is the 13 billion RMB valuation in the first round of financing when it was spun off in 2021, four years later, the post-Series D valuation reached 21 billion RMB.

The one calculated by securities firms is from a research report released by Goldman Sachs in January 2026. If benchmarked against Cambricon's valuation multiple, the value of the approximately 59% Kunlunxin equity held by Baidu is 22 billion US dollars, close to half of Baidu's total market value at that time, which can be extrapolated that the overall valuation of Kunlunxin is about 370 billion US dollars.

The one from market rumors is quoted by the Science and Technology Innovation Board Daily on June 29, citing sources that Kunlunxin plans to list in Hong Kong, with a target valuation of about 500 billion US dollars, about 40% higher than Baidu's market value.

The three valuations are made by different parties with different logics, but they have one thing in common: all of them are generated between primary market quotations, securities firm calculations and market rumors, and Kunlunxin itself has never made any official statement.

What is more interesting is that these three valuations have risen and fallen over the past four months. On June 29, Baidu's Hong Kong stock rose by more than 8%, with a market value of about 288 billion Hong Kong dollars, equivalent to 35.8 billion US dollars, making the 500-billion-US-dollar Kunlunxin 40% higher than it. As of today, Baidu's closing price is 74.70 Hong Kong dollars, and its market value has shrunk to 204.197 billion Hong Kong dollars, equivalent to 26.2 billion US dollars. The rumored valuation remains unchanged, but the premium gap has expanded from 40% to nearly 100%. The story is getting bigger and bigger, while the parent company's stock price is getting lower and lower.

03. Three Hidden Flaws Behind the $500 Billion Valuation

Whether this $500 billion valuation is reasonable depends on whether the pillars supporting it are stable enough.

The first pillar is "revenue is approaching that of Cambricon". Cambricon's 2025 revenue reached 6.497 billion RMB, a year-on-year increase of 453%, and it recorded its first annual profit of 2.059 billion RMB, with a market value of about 483 billion RMB. Since Kunlunxin's shipment volume is tied with Cambricon and its revenue scale is approaching, Cambricon's valuation multiple can be applied to it. But the difference is also obvious: Cambricon has real revenue, real profits and a public annual report; Kunlunxin does not even have a separate financial statement, and its revenue base has never been announced. For a company that has not even announced its revenue base, what logic is behind applying a 40x price-to-sales ratio?

The second pillar is "customer structure". Kunlunxin's revenue scale is "approaching Cambricon's", but how much of it comes from Baidu's internal procurement has not been publicly disclosed. In the early stage of independence, more than 90% of its revenue came from Baidu, and now its largest source of orders is still Baidu's self-use and several regular customers. The story of domestic substitution is real, but if the parent company's procurement is counted as part of market competitiveness, the valuation logic will be somewhat unsubstantiated.

The third point is the most notable. On June 29, according to people familiar with the matter: investment institutions that want to participate in Kunlunxin's IPO need to purchase Kunlunxin chips first, and the purchase amount is about 3 to 7 times the amount of shares they plan to subscribe for in the future. Exchanging IPO share quotas for procurement orders, behind the $500 billion valuation, there may be a row of pending procurement commitment letters waiting to be signed. ByteDance was once rumored to be considering adopting Kunlunxin chips, but after verification by Yicai, Byte responded that there is no intention of cooperation at present.

There is another often overlooked flaw. In May 2026, the China Information Technology Security Evaluation Center released the first batch of security and reliability evaluation results for AI training and inference chips. 9 chips including Huawei Ascend, Alibaba T-Head Zhenwu and Biren were selected, but Kunlunxin failed to make the list. This means that Kunlunxin may face access barriers in procurement scenarios with high security requirements such as government and finance. According to media reports, Kunlunxin has previously relied mainly on Samsung Electronics for foundry services, and is currently in talks with SMIC to shift production, which is also weakening its "fully domestic" market positioning.

Of course, we cannot dismiss all its achievements. The 10,000-card clusters of P800 have been actually delivered, the training of ERNIE 5.1 on fully domestic clusters has been successfully completed, and external customers like Tencent are real. The domestic computing power substitution story is real, but the valuation has already been pushed up before the full picture of the business is fully revealed.

In December 2025, when the first rumor of its spin-off and listing emerged, Baidu also issued a clarification announcement. A year later, no official announcement has been released, and the valuation rumor has changed from "40% higher than Baidu" to "nearly twice that of Baidu". Kunlunxin's listing timeline is more unpredictable than its chip iteration roadmap.

This article is from the WeChat official account "Caineng Quan", and is authorized for release by 36Kr.