A woman passes by the Baidu booth at the China International Technology Fair in Shanghai.
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GUANGZHOU, China – Baidu raised money for its $ 2 billion artificial intelligence (AI) semiconductor business, a person familiar with the matter told CNBC.
This occurs at a time when the Chinese search giant seeks to diversify its revenue streams.
The financing round was led by CPE, a Chinese private equity and asset management company, the person said. Venture capital firms IDG and Legend Capital were also involved. A fund from the Chinese investment company Oriza Holdings also participated in the round.
“Baidu’s Kunlun chip business recently completed a round of financing. We will release more information in due course,” said a Baidu spokesman, without providing any details.
Kunlun is the name of Baidu’s AI chip business. It was unclear how much money Baidu raised, but the source said the valuation of the chip business after the financing was $ 2 billion.
Reuters first reported the funding.
CNBC reported last month that Baidu was trying to raise money for a standalone AI chip company.
Now that the Kunlun business has raised money, it may pave the way for the division of the unit, but no final decision has been made, the source said.
AI chips are designed to process large amounts of data that can be used in artificial intelligence applications. An injection of money into Baidu’s business could help the company commercialize the technology.
It is part of a broader diversification effort by Baidu, which saw the company create an autonomous electric vehicle venture with Geely and raise money for a biotechnology business. Baidu, better known as a Chinese search giant, still relies heavily on advertising revenue.
Semiconductors and artificial intelligence are two key technologies that China hopes to increase its expertise and strength.