340 billion valuation: Li Yanhong's largest IPO, a seat in Kunlunxin's shares is hard to come by

Original Title: Li Yanhong's Biggest IPO is Here

Original Author: Wu Qiong, Investment Circle

"Can't grab the shares."

This scene is unfolding at Kunlun Core. Since it submitted its listing application to the Hong Kong Stock Exchange in a confidential manner at the beginning of the year, Kunlun Core is getting closer to going public. We are now in the stage of competing for cornerstone shares.

Thus, Li Yanhong's biggest IPO is emerging------according to foreign media reports, Kunlun Core's target valuation is about $50 billion (approximately 340 billion RMB). If it goes public, its market value will surpass Baidu. With such scale, it's no wonder that Kunlun Core is often seen as the most valuable asset in Baidu's AI story.

This battle for Baidu's turnaround will soon come to a conclusion.

Li Yanhong's Biggest IPO: Will Exceed Baidu

At this moment, emotions are running high.

Back to the beginning of this year, Baidu announced------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 for Kunlun Core's shares to be listed and traded on the main board of the Hong Kong Stock Exchange.

Since then, Kunlun Core's IPO actions have been quietly ongoing. Now, six months later, as the IPO preparation work continues to advance, Kunlun Core has reached a critical pre-listing stage. According to The Information, the company has now begun contacting potential investment institutions.

This is the last window for investors to enter Kunlun Core through the primary market, but the threshold is not low: reports indicate that Kunlun Core prioritizes investors who commit to purchasing chips during the allocation, requiring the value of the chips purchased to reach 3 to 7 times the subscription amount.

This means that if investors want to obtain cornerstone shares of Kunlun Core, they must first "allocate goods." As a result, purely financial investors may be kept out. Kunlun Core prefers industrial investors who already have sustained purchasing capabilities.

Ultimately, only a few will make it to the table. An investor told the investment community, "The competition for cornerstone shares is fierce," and more people find it "hard to secure a seat."

Undoubtedly, there are high expectations from the outside world for Kunlun Core. It is reported that Kunlun Core's target valuation is about $50 billion (approximately 340 billion RMB). This is not unfounded; according to IDC data, in the 2025 Chinese AI accelerator server market, Kunlun Core and Cambricon rank third among domestic manufacturers, each shipping about 116,000 cards.

Previously, a Goldman Sachs research report pointed out that if the market gives Kunlun Core a valuation multiple similar to Cambricon, the value of Baidu's equity will reach as high as $22 billion. As the demand for AI computing power explodes, Cambricon's market value recently surpassed one trillion.

Thus, the fierce competition for Kunlun Core's cornerstone shares has emerged.

Of course, Baidu will be the biggest winner. Reflecting on the announcement made by Li Yanhong at the beginning of the year, one of the benefits of Kunlun Core's spin-off listing is to enhance Kunlun Core's image among its customers, suppliers, and potential strategic partners to secure more business, and Baidu will also benefit from its growth through its shareholding.

The effect is immediate. After this news broke, Baidu's stock rose for four consecutive trading days, with its latest market value exceeding 300 billion HKD. If Kunlun Core's target valuation of $50 billion is realized, as its controlling shareholder, Baidu's shareholding value will exceed 100 billion. Thus, Li Yanhong is迎来了 another shining moment------Kunlun Core's market value will surpass Baidu.

Investors Gather: Waiting for a Super Return

Secretive, low-key, 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 embarked on Baidu's chip-making journey.

In 2021, Baidu officially spun off its Kunlun chip business and established a new company------Kunlun Core (Beijing) Technology Co., Ltd. Along with the independence came a luxurious financing round, led by CPE Yuanfeng, with investors including IDG Capital, Junlian Capital, and Yuanhe Puhua, with a valuation of about 13 billion.

Since then, Kunlun Core has become known to the outside world.

However, this was also the only time Kunlun Core publicly announced financing. But according to Qichacha, Kunlun Core has undergone multiple equity changes over the past five years, with many well-known investment institutions joining in succession------In July 2022, new shareholders included General Technology Venture Capital, China-Belarus Fund, Qianshan Capital, etc.; 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, and others appeared one after another; subsequently, there were also faces from social security funds, Zhongguancun Independent Innovation Special Fund, Beijing Artificial Intelligence Industry Investment Fund, Shunxi Fund, and CITIC Jin Investment Capital, making the lineup increasingly luxurious.

Perhaps the IPO actions have long been brewing. In July last year, Kunlun Core added 15 new shareholders, including funds under China Mobile, Beijing government guidance funds, Beijing Shanggou Juntai Fund, Guohai Innovation Capital, and CICC Capital, indicating a competitive spirit.

As of today, Kunlun Core has gathered a total of 57 shareholders. It can be anticipated that with Kunlun Core's listing, it will create another wave of collective wealth creation in the Hong Kong stock market.

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

Compared to its peers, Kunlun Core not only has order support from internal business lines such as search, cloud computing, and autonomous driving; it also has large state-owned enterprise clients like China Mobile, Southern Power Grid, and China Merchants Bank. Among these, the most critical deal was last August when Kunlun Core ranked first in all three bidding packages in China Mobile's procurement project, securing orders worth billions.

Our child has just grown up, and Kunlun Core is stepping out from Baidu's protection. Recently, at the Zhiyuan Conference, Kunlun Core's Vice President of R&D, Qi Wei, revealed that in addition to providing chips for Baidu, the company's commercial scale for external clients is continuously expanding, with the proportion of external business now exceeding that of supplying Baidu internally.

"Waking Up Early but Arriving Late": 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 battle of large models, Baidu's Wenxin Yiyan made its debut, becoming one of the earliest ChatGPT-like products in China, enjoying a period of glory.

However, reality is harsh.

After several years of sifting through the sands, the landscape of domestic large models has been established------on one side, similarly from major companies, Doubao, Qianwen, and others have gradually occupied users' minds; on the other side, new AI contenders have also emerged. Last week, Zhizhu's market value once surpassed one trillion. Although it has since declined, it is still nearly three times that of Baidu.

Not to mention, DeepSeek's first-round financing post-investment valuation is close to 400 billion; Kimi's valuation also rose to $31.5 billion (approximately 210 billion RMB) in its new financing round. In contrast, Baidu has repeatedly left the impression of "waking up early but arriving late."

In this situation, it is hard for Baidu not to feel anxious.

Right now, it is an opportunity that Baidu cannot miss. Moore Threads, Muxi, and others have already set examples in the secondary market; Cambricon also once set a new market value high; even more attention-grabbing is Changxin Technology, which has successfully passed the IPO review on the Sci-Tech Innovation Board… It is evident that the explosive growth of AI computing power is transmitting throughout the entire semiconductor industry chain.

And in Baidu's AI story, Kunlun Core is precisely regarded as the most valuable underlying asset. In early May, Kunlun Core officially launched its IPO guidance for the Sci-Tech Innovation Board, simultaneously advancing the "A+H" dual-line IPO. Facing a fleeting window of opportunity, Baidu is desperately racing against time.

This inevitably reminds one of Li Yanhong's judgment ten years ago that the era of artificial intelligence was about to arrive, bringing endless possibilities. "For Baidu, if it can seize the opportunity of artificial intelligence, in five to ten years, Baidu can become a completely different company."

If it misses this opportunity again, it will truly fall behind.