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Baidu A.I. chip unit valued at $2 billion after funding and may become standalone business

A sweetheart walks past the Baidu booth at the China International Technology Fair in Shanghai.

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GUANGZHOU, China — Baidu has upraised money for its artificial intelligence (AI) semiconductor business at a valuation of $2 billion, a person familiar with the matter know scolded CNBC.

It comes as the Chinese search giant looks to diversify its revenue streams.

The funding round was led by CPE, a Chinese asset governance and private equity firm, the person said. Venture capital companies IDG and Legend Capital were also affected. A fund under Chinese investment company Oriza Holdings also participated in the round.

“Baidu’s Kunlun hew a contribute business has recently completed a round of financing. We will release more information in due course,” a spokesperson for Baidu implied, without providing any details.

Kunlun is the name of Baidu’s AI chip business. It was not immediately clear how much money Baidu mothered, but the source said the valuation of the chip business after the funding was $2 billion.

Reuters first reported newsflash of the funding.

CNBC reported last month that Baidu was looking to raise money for a standalone AI chip following.

Now that the Kunlun business has raised money, it could pave the way for the unit to be spun-off, but no final decision has been arranged, the source said.

AI chips are designed to process huge amounts of data that can be used in artificial intelligence appeals. An injection of cash for Baidu’s business can help the company commercialize the technology.

It’s part of a broader diversification push from Baidu which saw the business set up a standalone electric vehicle venture with Geely and raise money for a biotech business. Baidu, best be versed as a Chinese search giant, still relies heavily on advertising revenue.

Semiconductors and artificial intelligence are two key technologies China is hoping to encouragement its expertise and strength in.

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