Baidu’s (BIDU) Kunlunxin Chip Unit Draws ByteDance Interest Ahead of Potential IPO

Baidu Inc (NASDAQ:BIDU) is one of the most promising metaverse stocks to buy now. Baidu shares have gained more than 32% over the past year, and analysts see more upside in the stock.

Baidu Inc (BIDU) in Chip Supply Talks Amid Unit IPO Plans

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On June 15, Reuters reported that TikTok parent ByteDance is considering ordering AI chips from Baidu Inc (NASDAQ:BIDU). Through its semiconductor subsidiary Kunlunxin, Baidu supplies graphics processing units used to power AI data centers and virtual world platforms. Tencent, a leading publisher of interactive videogames, is among Baidu’s chip customers.

Baidu expects its AI capabilities business to drive strong revenue growth in the future as the legacy advertising business cools. The AI capabilities business spans everything from AI chip sales to AI model offerings.

In addition to selling chips to external clients, Baidu uses Kunlunxin chips internally to power its own offerings, including its AI systems and cloud solutions. Baidu plans to spin out Kunlunxin into a separate publicly traded company as soon as this year. It’s considering Kunlunxin IPO in both Hong Kong and Shanghai, the Wall Street Journal reported on June 3. Baidu expects the spinoff to make it easier for the chip unit to acquire external customers.

Baidu Inc (NASDAQ:BIDU) is a Chinese tech giant that offers an internet search engine and cloud computing services. The company developed a metaverse platform known as XiRang, and its XiLing platform enables users to create 3D and 2D virtual humans.

While we acknowledge the risk and potential of BIDU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than BIDU and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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