Baidu's Chip Affiliate Explores Second Funding Round, Wants To Capitalize On Growing Appetite From Venture Capitalists

Baidu, Inc BIDU chip affiliate Kunlun discussed raising 2 billion yuan ($317 million) in its second funding round, Bloomberg reports.
Kunlun has deployed its AI chips to power Baidu's core searching services, and the new financing will help it further expand its client base beyond its parent in a market dominated by Nvidia Corp NVDA.
Demand for efficient semiconductors processing information got fueled by a boom in high-resolution video games, cryptocurrency mining, and other data-intensive applications.
The investment could lift the Beijing-based startup's valuation to 17 billion yuan ($2.5 billion) from 13 billion yuan at its first funding round a little over a year ago.
Kunlun, specializing in artificial intelligence chips, has recently started mass-producing microchips that pack more computational power by using 7-nanometer technology.
China's venture capitalists shifted away from internet businesses following intensifying regulatory crackdown to core technologies like semiconductors, favored by Beijing.
Chinese leaders are keen to cultivate a homegrown semiconductor industry and reduce their reliance on American technology following U.S. sanctions on Chinses companies.
Price Action: BIDU shares traded lower by 0.92% at $122.30 in the premarket on the last check Wednesday.