Baidu has told investors that demand for its in-house Kunlunxin AI chips will keep growing because Chinese buyers face constrained supply of alternatives, reinforcing expectations that Nvidia's products will remain largely locked out of the Chinese market. Speaking on the company's Q2 earnings call, AI Cloud Group executive Dou Shen said Baidu is pressing ahead with plans to spin off and float Kunlunxin, citing rising inferencing demand and China's "significant growth potential" as domestic chip supply stays limited.

The remarks come despite Washington's move to let Nvidia resume China sales, a reversal that has so far yielded no revenue for the chipmaker amid Beijing's own restrictions on such purchases; Nvidia previously said the export ban cost it $10.5 billion over six months. Baidu's AI cloud revenue climbed 50 percent year-on-year to nearly $1.1 billion, with GPU cloud revenue up 283 percent, though these figures trail rivals such as AWS, Google, Microsoft and Alibaba. The company also highlighted over a million autonomous Apollo Go robotaxi rides in Q2 and an 83 percent rise in daily active users of its ERNIE assistant, while overall revenue grew just 4 percent to $3.9 billion.