Baidu Kunlun AI chips projected to grow sixfold in 2026, listing plan under review
Baidu announced on December 7 that it is evaluating the possibility of spinning off its semiconductor subsidiary, Kunlun Core (Beijing) Technology Co., Ltd., for an independent public listing. The company clarified that while discussions are ongoing, the plan would require regulatory approval and there is no guarantee it will move forward.
According to a report from Morgan Stanley, Baidu's self‑developed AI chip revenue is expected to rise dramatically from 1.3 billion yuan (about 180 million USD) in 2025 to 8.3 billion yuan (about 1.15 billion USD) in 2026. This represents a sixfold increase and is projected to double Baidu's GPU computing revenue by 2027.
Morgan Stanley also raised Baidu's target stock price to 188 USD, noting that the company's rapid transformation into an AI‑first business has been underestimated. Analysts believe next year will bring a major surge in AI‑related growth.
Baidu has already shifted its business model toward AI, with its AI cloud division now accounting for roughly one‑quarter of total core revenue. This segment has become the company's primary growth engine, reflecting a broader trend among Chinese technology firms that are betting heavily on AI hardware as a new driver of expansion.
Kunlun Core (Beijing) Technology Co., Ltd. is Baidu's in‑house semiconductor unit, established to design and manufacture AI chips optimized for cloud computing, autonomous driving, and large‑scale machine learning tasks. The company has focused on developing processors that balance high performance with energy efficiency, aiming to compete with both domestic rivals and international chipmakers. Kunlun Core's products are already deployed in Baidu's own AI cloud services and are gradually expanding into broader commercial applications.
