Core Viewpoint - Baidu's AI chip subsidiary, Kunlun Chip, has initiated preparations for an IPO in Hong Kong, aiming to submit its A1 form by Q1 2026 and complete the listing by early 2027, which has positively impacted Baidu's stock price [1][3]. Group 1: IPO Plans and Market Reaction - Kunlun Chip plans to submit its A1 form to the Hong Kong Stock Exchange by Q1 2026, with a target listing date in early 2027 [1]. - Following the news, Baidu's stock price rose nearly 8% during the day, closing at 121.6 HKD, with a market capitalization of approximately 334.4 billion HKD [1]. Group 2: Financial Performance and Projections - Kunlun Chip is projected to achieve revenues of approximately 2 billion CNY in 2024, with a net loss of 200 million CNY, surpassing the performance of previously listed companies in the same sector [3]. - Revenue is expected to increase to 3.5 billion CNY in 2025, with external orders accounting for over half of total revenue, indicating a potential path to breakeven [3]. Group 3: Product Development and Market Strategy - Kunlun Chip has successfully produced the P800 chip, which won a large-scale procurement order from China Mobile, targeting cloud inference and AI computing scenarios [3]. - The company plans to launch the M100 product in 2026, focusing on cost-effectiveness for large-scale inference, and the M300 in early 2027, aimed at training and inference for trillion-parameter multimodal models [3]. Group 4: Company Background and Ownership Structure - Kunlun Chip originated from Baidu's "Intelligent Chip and Architecture Department," with research starting in 2011 and achieving independent financing in 2021 [4]. - As of the latest funding round, Kunlun Chip's post-money valuation is approximately 21 billion CNY, with Baidu retaining about 59.45% ownership and new state-owned investors increasing external shareholder participation to over 40% [4].