Original Title: The Biggest IPO of Li Yanhong is Coming

Original Author: Wu Qiong, Investment Circle

"The shares cannot be grabbed."

This scene is happening with Kunlun Core. Since it filed with the Hong Kong Stock Exchange in a confidential manner at the beginning of the year, the listing of Kunlun Core is getting closer. It is now the stage of competing for cornerstone shares.

Thus, the biggest IPO of Li Yanhong is surfacing——according to foreign media reports, Kunlun Core has a target valuation of about 50 billion USD (approximately 340 billion RMB). If listed, its market value will exceed Baidu. With such scale, it is no wonder that Kunlun Core is continually viewed by the outside world as the most valuable asset in Baidu's AI story.

This turnaround battle for Baidu will soon reveal its results.

Li Yanhong's Biggest IPO: Will Exceed Baidu

At this moment, emotions are running high.

Rewind to the beginning of this year, Baidu made an announcement——Kunlun Core has submitted a listing application form (A1 form) to the Hong Kong Stock Exchange through its joint sponsors in a confidential manner, seeking approval to list and trade Kunlun Core shares on the main board of the Hong Kong Stock Exchange.

Since then, Kunlun Core's IPO activities in Hong Kong have been quietly progressing. Now, half a year has passed, and as the IPO preparations continue to advance, Kunlun Core has reached a critical pre-listing stage. According to The Information, the company has now begun to engage with potential investors.

This is the final window for investors to enter Kunlun Core through the primary market, but the threshold is high: reports indicate that Kunlun Core prioritizes investors committing to purchasing chips during the allocation, requiring the value of the chips to be 3 to 7 times the subscription amount.

This means that if investors want to secure cornerstone shares of Kunlun Core, they need to first "distribute goods." As a result, purely financial investors may be kept outside the door. Kunlun Core prefers industrial investors who already have continuous purchasing capabilities.

In the end, only a few will make it to the table. An investor told the Investment Circle, "The competition for cornerstone shares is fierce," and many find it "difficult to secure a seat."

Undoubtedly, expectations for Kunlun Core are high in the market. It is reported that Kunlun Core has a target valuation of about 50 billion USD (approximately 340 billion RMB). This is not without foundation; according to IDC data, in 2025, Kunlun Core and Cambricon rank as the third domestic players in the AI accelerator server market, each expected to ship around 116,000 cards.

Previously, a Goldman Sachs research report indicated that if the market values Kunlun Core similarly to Cambricon, the value of Baidu's equity could soar to 22 billion USD. With the current explosion in AI computing power demand, Cambricon's market value recently surpassed one trillion.

Thus, the scene of fierce competition for Kunlun Core's cornerstone shares unfolded.

Of course, Baidu will be the biggest winner. It reminds one that earlier this year, Li Yanhong explained in an announcement that one of the benefits of spinning off Kunlun Core for listing is to enhance Kunlun Core's image among its clients, suppliers, and potential strategic partners to secure more business; Baidu will also benefit from its growth through its shareholding.

The effects are immediate. After this news broke, Baidu's stocks rose for four consecutive trading days, with its latest market value in Hong Kong exceeding 300 billion HKD. If Kunlun Core's target valuation of 50 billion USD is achieved, as its controlling shareholder, the value of Baidu's shares would exceed 100 billion. Thus, Li Yanhong is ushering in another moment of glory——Kunlun Core's market value will exceed Baidu.

Investors Gather: Waiting for a Super Return

Secretive, low-profile, yet already a proud achievement of Li Yanhong.

The story of Kunlun Core can be traced back to 2011, originally part of Baidu's intelligent chip and architecture department. A team from leading companies such as Baidu, Qualcomm, Marvell, and Tesla began Baidu's journey into chip-making.

By 2021, Baidu officially separated its Kunlun chip business, establishing a new company——Kunlun Core (Beijing) Technology Co., Ltd. Along with its independence came a lavish financing round, led by CPE Yuanfeng, with investors including IDG Capital, Junlian Capital, Yuanhe Puhua, etc., then valued at around 13 billion.

Since then, Kunlun Core began to gain recognition from the outside world.

However, this was the only time Kunlun Core publicly announced financing. But according to enterprise checks, Kunlun Core has undergone multiple equity changes over the years, as numerous well-known investment institutions successively came on board——in July 2022, new shareholders including General Technology Venture Capital, China-Belgium Fund, and Qianshan Capital were added; just half a month later, CITIC Securities and Linxin Investment also became shareholders of Kunlun Core.

In 2023, BYD, Zhongguancun Science City Company, Sanya Yuhai Fund, China Internet Investment Fund appeared one by one; subsequently, the list also included the Social Security Fund Zhongguancun Independent Innovation Special Fund, Beijing Artificial Intelligence Industry Investment Fund, Shunxi Fund, and CITIC Jianan Capital, among others, making the lineup increasingly luxurious.

Perhaps the IPO action had been brewing for a while; last July, Kunlun Core added 15 new shareholders, including a fund under China Mobile, Beijing government guidance fund, Beijing Shangaojuntai Fund, Guohai Innovation Capital, and CICC Capital, suggesting a motive to seize opportunities.

As of today, Kunlun Core has gathered 57 shareholders behind it. It is foreseeable that with Kunlun Core's listing, a new wave of collective wealth creation will occur in the Hong Kong stock market.

Backed by the resources of large corporations, Kunlun Core can no longer be ignored. Currently, Kunlun Core's main product is the P800, which is set to launch in 2024, competing with NVIDIA's A800, made using Samsung's 7nm process, primarily targeting data center inference scenarios. Additionally, the Kunlun Core M100, optimized for large-scale inference scenarios, is scheduled for launch in early 2026. The Kunlun Core M300 is aimed at ultra-large-scale multimodal model training and inference scenarios, planned for release in 2027.

Compared to its peers, Kunlun Core not only benefits from orders supported by internal business lines such as search, cloud computing, and autonomous driving; it also has large state-owned enterprise customers like China Mobile, Southern Power Grid, and China Merchants Bank. Among the most notable is a deal last August, where Kunlun Core ranked first in all three bids for a China Mobile procurement project, securing orders worth billions.

Our child is growing up, and Kunlun Core is stepping out from under Baidu's protection. Recently at the Zhiyuan Conference, Kunlun Core's VP of R&D Qi Wei revealed that besides providing chips for Baidu, the company's commercial scale targeting external customers is continuously expanding, with the proportion of external business now exceeding that of supplying Baidu internally.

"Waking Up Early to Miss the Gathering": A Turnaround Battle

This day, Li Yanhong has waited a long time.

It is worth mentioning that Baidu was one of the first internet companies to shout "All in AI." During the model war period, Baidu's Wenxin Yiyan debuted first, becoming one of the earliest domestic products similar to ChatGPT, achieving significant success at one point.

However, reality is harsh.

After years of filtering through the market, the domestic large model landscape has taken shape——on one side, homegrown companies like Doubao and Qianwen are gradually occupying user minds; on the other, new AI contenders have come from behind. Last week, Zhizhu’s market value briefly surpassed one trillion. Although it has since retreated, it remains nearly equal to three Baidus.

Not to mention, DeepSeek's first round post-investment valuation approached 400 billion; Kimi’s valuation also rose to 31.5 billion USD (approximately 210 billion RMB) in the new round of financing. In contrast, Baidu has repeatedly given the impression of "waking up early to miss the gathering."

In this context, it is difficult for Baidu not to feel anxious.

Right now, it is an opportunity that Baidu cannot afford to miss. Companies like Moole Thread and Muxi have already demonstrated success in the secondary market; Cambricon has also once set a new record for market value; and the star of the moment, Changxin Technology, has successfully passed its IPO on the Sci-Tech Innovation Board... 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, Kunlun Core is viewed as the most valuable underlying asset. In early May, Kunlun Core officially commenced its IPO guidance for the Sci-Tech Innovation Board, simultaneously advancing the "A+H" dual-line IPO. Faced with an ephemeral window of opportunity, Baidu is desperately racing against time.

This inevitably recalls that ten years ago, Li Yanhong had predicted that the era of artificial intelligence was about to come, bringing endless possibilities. "For Baidu, if it can seize the opportunity of artificial intelligence, in five to ten years, Baidu could become a completely different company."

If it misses this chance again, it will truly be left behind.

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