Baidu Emerges as China's AI Chip Champion with Five-Year Roadmap to Challenge Nvidia Dominance

Baidu is emerging as a major AI chip player in China to fill the Nvidia gap

A general view of the Baidu logo is seen at the Shanghai New Expo Center during the World Artificial Intelligence Conference 2025 in Shanghai, China, on July 28, 2025. Tech giant Baidu is emerging as one of China's key artificial intelligence chip players, positioning itself as a challenger to Huawei as both look to fill the void left by industry leader Nvidia being kept out of the country. Best-known as China's biggest search business, Baidu has in recent years refocused its business around driverless cars and AI, including a majority-owned subsidiary, Kunlunxin, which designs chips. Several analysts have upgraded their outlook on Baidu's stock over the past few weeks, citing the semiconductor business and forecasting the unit will gain more domestic orders. This month, Baidu laid out a five-year roadmap for its Kunlun AI chips, beginning with the M100 in 2026 and the M300 in 2027. The company already uses a mix of its self-developed chips in its data centers to run its ERNIE AI models, as well as Nvidia products. Baidu makes money by selling its chips to third parties building data centers as well as renting out computing capacity via its cloud. It has sought to position itself as a so-called "full stack" AI offering with infrastructure made up of chips, servers and data centers, as well as AI models and applications. And the chip business appears to be gaining traction. Earlier this year, Kunlunxin won orders from suppliers to China Mobile, one of the country's biggest mobile carriers. "Kunlunxin has emerged as a leading domestic AI chip developer, focusing on high- performance AI chips for large language model (LLM) training and inference, cloud computing, and telecom and enterprise workloads," analysts at Deutsche Bank said in a note this month. While Nvidia's graphics processing units (GPUs) are widely regarded as the most advanced chips for training and running AI, the company has been blocked by the U.S. government from selling its top-end product to China. Beijing has also reportedly been persuading local tech companies not to buy the H20, a less powerful Nvidia chip designed for the Chinese market and greenlit for export. With Huawei -- the leading player through its massive clusters of chips -- out of the picture, analysts are suggesting Baidu will fill the void and its chip business is set for explosive growth. "We believe domestic demand for AI compute in China remains intense, and hyperscalers are increasingly sourcing from local solution providers," JPMorgan said in a note on Sunday. "We view Kunlun AI chip as one of the best positioned." The investment bank analysts forecast Baidu chips sales to increase six-fold to reach 8 billion Chinese yuan ($1.1 billion) in 2026. Analysts at Macquarie estimate that Baidu's Kunlun chip unit could be valued at about $28 billion. Baidu is not alone among China's tech giants when it comes to self-developed semiconductors. CNBC reported in August that Alibaba is also developing its next-generation AI chip.

Baidu Unveils 5-Year AI Chip Roadmap To Replace Nvidia in China - Baidu (NASDAQ:BIDU)

Baidu Inc (NASDAQ:BIDU) is rapidly emerging as one of China's leading artificial intelligence chip players, directly challenging Huawei Corp as both companies work to replace Nvidia Corp (NASDAQ:NVDA), whose top processors are now blocked from the Chinese market. BIDU is biding its time at current levels. See what is happening here. Once known primarily as China's dominant search engine, Baidu has shifted its focus to AI and autonomous driving through its majority-owned chip subsidiary, Kunlunxin. Baidu stock gained 38% year-to-date. Investor optimism over Baidu's shift toward AI -- particularly its fast-growing AI Cloud business and Apollo Go autonomous driving operations -- has pushed the stock higher. Also Read: Baidu's AI Cloud Takes Off, But Ad Slump Steals Spotlight Baidu And AI Analysts have recently upgraded their outlook on Baidu, citing rising semiconductor momentum and growing domestic demand, CNBC reported. Strong, sustained AI demand is giving Baidu an opening. As The Futurum Group's Nick Patience told CNBC, Baidu's chip strategy is "both a necessity and an opportunity", one that could not only solve Baidu's own supply problems but also position the company as a critical AI hardware provider for China's broader ecosystem. Baidu unveiled a five-year roadmap for Kunlun chips, starting with the M100 in 2026 and the M300 in 2027. According to the report, Baidu already deploys its own processors alongside Nvidia hardware to power its ERNIE AI models and sells these chips to third-party data center builders while also offering cloud compute capacity. The business is gaining traction. Earlier in 2025, Kunlunxin secured orders from suppliers to China Mobile. Deutsche Bank called Kunlunxin a leading domestic AI chip developer -- targeting LLM training, inference, cloud, and telecom workloads. With U.S. restrictions preventing Nvidia from selling its best GPUs to China, and Beijing discouraging purchases of Nvidia's weaker H20 chips, analysts expect Baidu to fill the gap left by Huawei's constrained supply. JPMorgan forecasts Baidu's chip sales will surge sixfold to 8 billion yuan ($1.1 billion) by 2026, while Macquarie values the Kunlun unit at roughly $28 billion. China's chip shortage is accelerating this shift. Even top players such as Alibaba Group Holding Ltd (NYSE:BABA) and Tencent Holding Ltd (OTC:TCEHY) both flagged the tight supply of AI-grade semiconductors as a bottleneck for data center growth. Baidu's AI Shift Meanwhile, Baidu is cutting jobs across major divisions and reorganizing its AI teams to streamline operations after a loss-making quarter. It is also shifting leadership of its ERNIE AI model and chatbot to younger managers, aiming to boost competitiveness and accelerate innovation, SCMP reported. Recent Earnings On November 18, Baidu reported a third-quarter revenue of 7% decline to $4.38 billion. Analysts expected $4.31 billion in revenue for the quarter. Adjusted operating income declined 69% to $310 million. The quarterly adjusted EPS of $1.56 topped the analyst consensus estimate of $0.91. BIDU Price Action: Baidu shares were up 0.57% at $117.00 during premarket trading on Wednesday, according to Benzinga Pro data. Read Next: Buy Post-Earnings Dip, Amazon Is Still Top Pick: Analyst Photo by Ascannio via Shutterstock BIDUBaidu Inc$117.000.57%OverviewBABAAlibaba Group Holding Ltd$156.00-1.02%NVDANVIDIA Corp$180.850.33%TCEHYTencent Holdings Ltd$78.95-%Market News and Data brought to you by Benzinga APIs