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Chinese technology giant Baidu said it has taken steps toward a potential Hong Kong stock market listing for its artificial intelligence chip unit, Kunlunxin, as China accelerates efforts to build a domestic semiconductor industry amid continued U.S. technology restrictions.

Baidu said it has confidentially submitted an application to the Hong Kong Stock Exchange for a possible spin-off of Kunlunxin. The company stressed that key details, including the size and timing of any offering, have not been finalized and that regulatory approvals would still be required.

If completed, the move would mark another high-profile listing attempt by a Chinese chipmaker seeking capital as Beijing encourages homegrown alternatives to U.S.-made semiconductors. Baidu said it currently holds a majority stake in Kunlunxin and would continue to control the unit following any listing.

Kunlunxin plays a growing role in Baidu’s artificial intelligence strategy, supplying chips used in data centers and cloud computing operations that support the company’s AI models. While Baidu still relies heavily on chips from U.S.-based Nvidia for advanced computing, Kunlunxin has allowed the company to increase the use of internally designed hardware.

The planned listing comes as U.S. export controls have limited Chinese firms’ access to cutting-edge AI chips, pushing companies to seek domestic solutions. In response, Beijing has directed significant state funding toward semiconductor development and encouraged the use of locally produced chips.

Kunlunxin has increasingly expanded beyond Baidu, selling its products to external customers and positioning itself as a commercial chip supplier rather than an internal unit. Industry analysts have said the company’s strength lies in its ability to work with widely used AI software frameworks, making it easier for users to transition workloads away from U.S. chips.

Media reports have estimated Kunlunxin’s annual revenue at more than 3.5 billion yuan, with external customers expected to account for a growing share of sales. The company has also secured major contracts with state-owned telecom firms and attracted new investors in recent funding rounds.

Despite its progress, analysts caution that Kunlunxin and other domestic chipmakers cannot yet fully replace the most advanced U.S. semiconductors, particularly for high-end AI training tasks. Instead, they are expected to play a complementary role alongside other Chinese chip developers as Beijing builds a broader domestic computing ecosystem.