Baidu A.I. chip unit valued at $2 billion after funding and may become standalone business


A woman walks past the Baidu booth at the China International Technology Fair in Shanghai.

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GUANGZHOU, China — Baidu has raised money for its artificial intelligence (AI) semiconductor business at a valuation of $2 billion, a person familiar with the matter told CNBC.

It comes as the Chinese search giant looks to diversify its revenue streams.

The funding round was led by CPE, a Chinese asset management and private equity firm, the person said. Venture capital companies IDG and Legend Capital were also involved. A fund under Chinese investment company Oriza Holdings also participated in the round.

“Baidu’s Kunlun chip business has recently completed a round of financing. We will release more information in due course,” a spokesperson for Baidu said, without providing any details.

Kunlun is the name of Baidu’s AI chip business. It was not immediately clear how much money Baidu raised, but the source said the valuation of the chip business after the funding was $2 billion.

Reuters first reported news of the funding.

CNBC reported last month that Baidu was looking to raise money for a standalone AI chip company.

Now that the Kunlun business has raised money, it could pave the way for the unit to be spun-off, but no final decision has been made, the source said.

AI chips are designed to process huge amounts of data that can be used in artificial intelligence applications. An injection of cash for Baidu’s business can help the company commercialize the technology.

It’s part of a broader diversification push from Baidu which saw the company set up a standalone electric vehicle venture with Geely and raise money for a biotech business. Baidu, best known as a Chinese search giant, still relies heavily on advertising revenue.

Semiconductors and artificial intelligence are two key technologies China is hoping to boost its expertise and strength in.

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