Baidu Stock Soars as Chinese Tech Firms Push AI Chips

Baidu’s stock has surged after the company, alongside Alibaba, announced significant progress in developing in-house AI chips. This marks a strategic pivot as Chinese tech giants adapt to tightening U.S. restrictions on advanced semiconductors, particularly from Nvidia.

Baidu is currently testing its latest Kunlun P800 chip to train updated versions of its Ernie AI model, signaling greater independence from foreign suppliers. Alibaba has also reported that its custom chips for smaller AI models are achieving performance comparable to Nvidia’s H100, a benchmark in the global AI race.

This development is part of Beijing’s broader strategy of technological self-reliance. By building domestic AI chips, companies like Baidu and Alibaba aim to secure their supply chains and reduce vulnerability to geopolitical pressures. While they still rely on Nvidia for their most advanced systems, the narrowing performance gap indicates a shift in power dynamics.

Investor confidence reflects this momentum. Baidu’s rally has spilled over to other Chinese chipmakers and cloud computing firms, as markets anticipate strong government backing and accelerated innovation. If sustained, this push could reshape the global AI ecosystem, challenging U.S. dominance in semiconductor technology and giving China a firmer foothold in the AI arms race.