Baidu Group-SW's stock surged 5.11% in pre-market trading on Monday, driven by reports that its artificial intelligence chip division, Kunlunxin, is preparing for a Hong Kong initial public offering with a target valuation of $50 billion.

According to multiple reports, potential investors in the IPO are being asked to commit to purchasing Kunlunxin chips worth three to seven times their intended subscription amount, signaling strong confidence in the unit's commercial pipeline and future revenue. The planned listing represents a significant step in unlocking value from Baidu's semiconductor business, which has expanded its external sales in recent years and counts major technology firms like Tencent as customers.

The move comes amid a broader rebound in onshore technology IPOs in China, with regulators supporting listings of chip and AI companies as part of a push for technological self-reliance. Analysts have previously noted that clarity on the spinoff timeline for Baidu's chip and cloud businesses could serve as a positive catalyst for the parent company's share price.