A girl walks previous the Baidu sales space on the China Worldwide Expertise Honest in Shanghai.

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GUANGZHOU, China — Chinese language search large Baidu is in talks to lift cash for a standalone synthetic intelligence semiconductor firm, an individual with data of the matter advised CNBC.

The transfer is emblematic of an ongoing push amongst China’s largest know-how corporations to spice up their prowess within the chip sector. And for Baidu, it marks an extra effort to diversify its enterprise effectively past promoting.

Baidu’s Nasdaq-traded shares jumped greater than 3.5% after hours. They climbed 6.67% on Tuesday.

Baidu’s chip firm could be a subsidiary, with the search large more likely to be the bulk shareholder, the individual stated. Enterprise capital corporations GGV and IDG Capital are concerned in early stage discussions to spend money on Baidu’s chip agency, the supply added. Each corporations have in depth investments in China.

Baidu declined to remark when contacted by CNBC. IDG Capital was not instantly accessible for remark. Calls to GGV’s workplaces in Singapore, Shanghai and Beijing went unanswered.

Presently, Baidu has an in-house chip unit that has helped to develop its Kunlun semiconductors, designed to course of big quantities of information for synthetic intelligence purposes. However a standalone chip firm is seen serving to Baidu to higher commercialize its know-how, the supply stated.

The semiconductor enterprise would purpose to promote chips to prospects in a number of industries together with automakers, that are presently dealing with a global chip shortage.

A standalone chip maker might additionally tie into different elements of Baidu’s companies, reminiscent of its driverless automobile software program.

Diversification flurry

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