Investor confidence rises as Baidu leverages in-house Kunlun chips for AI development. Baidu Inc. shares climbed sharply on Wednesday as investor sentiment strengthened around the company’s growing push into semiconductor development and artificial intelligence applications. The surge comes after reports confirmed Baidu is deploying its home-grown Kunlun P800 chips to train its Ernie large language models, reducing reliance on U.S.-made processors.
The move is being seen as a critical step in China’s drive for semiconductor independence, particularly in light of tightened U.S. export restrictions on advanced chips. Hong Kong-listed shares of Baidu Inc soared as much as 17% to HK$131.9, their highest level in nearly a year. The rally added to strong gains last week, leaving the stock up more than 40% in September alone.
Adding further momentum, Baidu Inc recently announced a strategic partnership with China Merchants Group, one of the country’s largest state-owned enterprises. The collaboration aims to integrate artificial intelligence across key sectors including transportation, finance, and real estate.
Analysts upgrade Baidu as confidence grows
Investor optimism was further fueled by an analyst upgrade. Arete Research Services raised its rating on Baidu’s American depositary receipts from “sell” to “buy,” marking the end of a bearish outlook it had maintained since May 2024. Analysts highlighted Baidu’s progress in developing its proprietary AI chips and its ability to commercialize AI technologies in partnership with state-backed entities.
The shift in analyst sentiment underscores broader expectations that Baidu’s strategic pivot toward self-reliant semiconductor technology could insulate it from global supply chain disruptions and geopolitical headwinds. It also places Baidu Inc in a stronger position within China’s competitive AI ecosystem, which has become a national priority for economic and technological resilience.
A push for tech self-sufficiency in China
Baidu’s progress reflects China’s broader policy goals of reducing dependence on foreign semiconductors. Domestic regulators have already discouraged the use of Nvidia’s H20 chips, signaling support for home-grown alternatives. By leveraging the Kunlun P800, Baidu Inc not only strengthens its product pipeline but also aligns itself with Beijing’s long-term objectives of achieving technological sovereignty.
Market watchers note that Baidu’s efforts mirror a growing trend among Chinese technology firms to develop in-house hardware solutions. This approach is viewed as both a business necessity and a strategic imperative amid continuing restrictions on access to U.S. technologies.
With shares climbing to new highs, Baidu’s momentum illustrates how confidence in local chipmaking can translate into rapid stock market gains. The combination of a breakthrough in AI chip development and a partnership with a major state-owned enterprise has positioned the company as a key player in China’s quest for digital independence.
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