Baidu Inc. (NASDAQ:BIDU) stock rose on Tuesday as the company hit a major AI adoption milestone while advancing plans to unlock value from its chip business.
Ernie Assistant User Base Tops 200 Million
Baidu's Ernie AI assistant surpassed 200 million monthly active users. The Chinese tech giant has integrated its AI-powered Ernie Assistant into its core search app and personal computers, and has also connected it to popular platforms such as JD.com Inc (NASDAQ:JD), Meituan (OTC:MPNGY), and Trip.com Group Limited (NASDAQ:TCOM), enabling users to book flights, order food, and seek health or legal information.
Users can generate images and videos, write summaries, and select different AI models, including DeepSeek or Baidu's own Ernie model, the Wall Street Journal reported on Tuesday, citing sources familiar with the matter.
Baidu also links the assistant with Baidu Maps and Baidu Health. The milestone comes as rivals, including ByteDance, Alibaba Group Holding Limited (NYSE:BABA), and Tencent Holding Ltd (OTC:TCEHY), ramp up AI investments.
Kunlunxin IPO Aims to Unlock Chip Value
Baidu is moving to unlock value by preparing a Hong Kong IPO for its AI chip unit, Kunlunxin, which has hired major banks to work on a listing that could raise up to $2 billion, with the final size still under discussion.
The company said the spinoff will spotlight Kunlunxin's AI chip business, expand funding options, and improve accountability, while allowing the company to retain majority ownership.
Analysts view the move as both strategic and necessary as China seeks domestic alternatives to Nvidia Corp (NASDAQ:NVDA) amid export restrictions.
They expect Kunlunxin's chips to play a larger role in data centers and telecom networks, with JPMorgan projecting Baidu's chip revenue to grow sixfold by 2026 and valuing Kunlunxin as a significant standalone AI hardware business.
BIDU Price Action: Baidu shares were up 3.38% at $154.74 at last check Tuesday, according to Benzinga Pro data.
Photo by Ascannio via Shutterstock
