BIDU(US:BIDU) BambooWorks·2025-12-16 09:10Core Viewpoint - Baidu is considering the spin-off and IPO of Kunlun Chip, which has generated renewed investor interest in the company after a period of underperformance compared to its peers [2][4]. Group 1: Kunlun Chip Overview - Kunlun Chip was originally part of Baidu's smart chip and architecture division, starting its self-developed chip project in 2011 and becoming an independent entity in 2021 with an initial valuation of 13 billion yuan [4]. - The chip has undergone rapid iterations, with the first generation launched in 2021 and the second generation in 2023, alongside the introduction of the K100 accelerator card and RH800 server [4]. Group 2: Financial Performance - Kunlun Chip's revenue is projected to reach 5 billion yuan in 2025, with expectations of surpassing 10 billion yuan in the following year [6]. - In 2022, Kunlun Chip generated 2 billion yuan in revenue with a net loss of 200 million yuan, but is expected to achieve 3.5 billion yuan in revenue this year and break even [5][6]. Group 3: Market Position and Trends - Kunlun Chip ranked second in the Chinese data center AI accelerator card market with nearly 70,000 GPUs, significantly behind Nvidia's 1.9 million GPUs [5]. - The Chinese government is heavily supporting domestic chip development in response to U.S. technology restrictions, which is a strong catalyst for the chip business [7]. Group 4: Baidu's Broader Business Context - Baidu's overall financial performance has been disappointing, with a 7% year-on-year revenue decline to 31.17 billion yuan in Q3, and a significant drop in online marketing revenue [6]. - Despite the challenges, the potential success of Kunlun Chip and other initiatives like the autonomous driving service "Luobo Kuaipao" could revitalize Baidu's market valuation [9][11].