Shares in Chinese internet giant Baidu jumped sharply on Thursday, 16 July 2026, after the company unveiled a new in-house artificial intelligence chip designed to reduce dependence on US semiconductor exports. The stock rose more than 7% in Hong Kong afternoon trading, its biggest single-day gain in three months, pushing the company's market capitalisation above £45bn.
The rally came as analysts at several investment banks upgraded their ratings on Baidu, citing the chip's potential to lower production costs and accelerate the rollout of its Ernie AI platform. 'This development signals a strategic pivot towards self-sufficiency in AI hardware, which could improve margins and insulate Baidu from future US export controls,' said a tech analyst at a London-based brokerage, speaking on condition of anonymity.
The news rippled through global markets, with the Hang Seng Tech Index climbing 2.3% on the session. In London, the FTSE 100 ended the day flat at 8,212.5 points, but ETFs tracking Asian tech stocks saw increased trading volume. UK pension funds with exposure to emerging market equities—particularly those holding iShares MSCI China ETFs—benefited from the uplift, though analysts cautioned that geopolitical risks remain.
Baidu's chip announcement comes amid a broader push by Chinese technology firms to develop homegrown alternatives to Nvidia and AMD processors. For UK investors, the development underscores the growing importance of AI-related supply chains and the potential volatility tied to US-China trade tensions. 'While this is positive for Baidu specifically, it doesn't change the structural risks facing the sector,' noted a fund manager at a major UK asset manager.
The rally also lifted shares of other Chinese tech names, including Alibaba and Tencent, which gained 1.8% and 2.1% respectively. UK-listed investment trusts focused on Asian technology, such as the Baillie Gifford Pacific Horizon Trust, saw net asset value increases of around 1.5% in afternoon trading.