Baidu's Chip Affiliate Eyes Fundraise at $2.5 Billion Valuation

  • In Business
  • 2022-05-18 08:13:07Z
  • By Bloomberg

(Bloomberg) -- Baidu Inc.'s chip affiliate is looking to raise 2 billion yuan ($317 million) in a new funding round, people familiar with the matter said, as venture capitalists in China shift away from internet businesses and hone in on core technologies like semiconductors, favored by Beijing.

Most Read from Bloomberg

  • Onetime Richest Singapore Tycoon Has Lost 80% of His Fortune

  • Walmart Flashes a Warning Sign to the Entire Consumer Economy

  • Elon Musk Has a Bigger Problem Than Twitter Bots: A Huge Debt Burden

  • US Set to Block Russian Debt Payments, Raising Default Odds

  • Elon Musk Does Not Care About Spam Bots

Kunlun is in advanced talks with investors for its second fundraising round, said the people, who asked not to be identified as the information is private. The investment, if finalized, would lift the Beijing-based startup's valuation to as much as 17 billion yuan ($2.5 billion), one of the people said, up from 13 billion yuan at its first funding round a little over a year ago.

Discussions are still ongoing and details such as the deal size and valuation are subject to change, said the people. Representatives from Kunlun and Baidu declined to comment.

With Chinese regulators stepping up oversight of the country's once freewheeling internet sector, startups with fundamental technologies like chipmaking are fielding heated interest from investors. The amount of venture capital going into semiconductor startups hit $8.8 billion in 2021 alone, up three-fold from a year ago, according to market research firm Preqin.

China Venture Funding Hits Record $131 Billion Despite Crackdown

Kunlun, which specializes in artificial intelligence chips, has recently started mass producing microchips that pack more computational power by using 7-nanometer technology. The firm has deployed its AI chips to power Baidu's core searching services, and the new financing will help it further expand its client base beyond its parent.

Earlier last year, venture firms including IDG Capital and Legend Holdings Ltd.'s venture arm invested 1.5 billion yuan in Kunlun, before it was spun off from the Chinese search giant.

Chinese leaders are keen to cultivate a home-grown semiconductor industry and reduce their reliance on American technology. Under former President Donald Trump, Washington imposed a series of sanctions on Chinese chipmakers including Semiconductor Manufacturing International Corp. and Huawei Technologies Co.'s HiSilicon unit, cutting off vital equipment and knowhow needed to make the most advanced chips that power everything from mobile phones to data centers.

In response, Chinese president Xi Jinping's administration pledged to boost spending and drive research into cutting-edge chips and AI as part of its latest five-year plan, laying out a technological blueprint to vie for global influence with the U.S.

Demand for semiconductors capable of processing information quickly have increased in recent years, fueled by a boom in high-resolution video games, cryptocurrency mining and other data-intensive applications. The global AI chip market is currently led by Nvidia Corp., while the likes of Inc. and Alphabet Inc.'s Google have also invested in their own bespoke server microchips.

Most Read from Bloomberg Businessweek

  • Tech's High-Flying Startup Scene Gets a Crushing Reality Check

  • China's Pullback on Lending Stalls Dreams of Rebuilding Nigeria

  • The Tighter Labor Market Is Making Restaurants More Like Factories

  • Starbucks Baristas Are Unionizing, and Even Howard Schultz Can't Make Them Stop

  • Venture Capitalists Are Aiming to Disrupt Fish Farming

©2022 Bloomberg L.P.


More Related News

US, Other G-7 Nations to Pledge Ban on New Russian Gold Imports
US, Other G-7 Nations to Pledge Ban on New Russian Gold Imports

(Bloomberg) -- US President Joe Biden and fellow Group of Seven leaders will agree to announce a ban on new gold imports from Russia, a person familiar with ...

US Layoffs, Hiring Freezes Are Tip of Labor Market Slowdown
US Layoffs, Hiring Freezes Are Tip of Labor Market Slowdown

(Bloomberg) -- Sign up for the New Economy Daily newsletter, follow us @economics and subscribe to our podcast.Most Read from BloombergGermany Pushes for G-7...

Fear Has Gone Missing in Wall Street
Fear Has Gone Missing in Wall Street's Slow-Motion Bear Market

(Bloomberg) -- For all the pain that has piled up in the US stock market, one thing has been in surprisingly short supply: Fear.Most Read from...

Germany Pushes for G-7 Reversal on Fossil Fuels in Climate Blow
Germany Pushes for G-7 Reversal on Fossil Fuels in Climate Blow

(Bloomberg) -- Most Read from BloombergGermany Pushes for G-7 Reversal on Fossil Fuels in Climate BlowSupreme Court Overturns Roe, Transforming Abortion...

Bitcoin Options Point to Positive Signs After Rout, Traders Say
Bitcoin Options Point to Positive Signs After Rout, Traders Say

(Bloomberg) -- Crypto is undergoing a historic bout of volatility, but options traders are seeing positive signs within the market in the wake of the ruckus ...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


Top News: Business