Baichuan’s 2027 IPO Bet Rides China’s New Rules for Loss-Making AI

Baichuan Intelligence is aiming for a 2027 initial public offering, founder Wang Xiaochuan said at a January 13 media briefing, months after the Chinese large-language-model startup banked roughly $700 million in a single funding round. The company has not formally opened an IPO process.

What made that timeline plausible did not happen inside Baichuan’s offices. On June 17, 2026, the Shanghai Stock Exchange extended its fifth listing standard to loss-making AI and quantum-tech developers, letting companies with no profit at all go public for the first time. Baichuan and its chief rival, DeepSeek, are now racing toward the same open door.

What Just Changed at China’s Stock Exchange?

Loss-making large-model developers can now list on Shanghai’s STAR Market without ever turning a profit, so long as they clear a market-cap floor and pass a government technology review. That single rule change, not any single company’s earnings, is what turned 2027 IPO talk from ambition into a workable calendar.

The exchange clarified rules for unprofitable AI developers under a standard requiring an anticipated market capitalization of at least 4 billion yuan, about $591 million, plus government sign-off on the company’s underlying technology. No revenue threshold. No profit test. Just scale and state approval.

The timing was not accidental. China’s large language model firms have been burning cash for years while competing against better-funded American labs, and the old listing rules simply excluded most of them. MiniMax, an AI developer that already went public in Hong Kong in January 2026, has seen its shares roughly triple since that debut, a data point regulators in Shanghai were watching closely as they drafted the new standard.

From Sogou to a $2.7 Billion Startup in Three Years

Wang Xiaochuan founded Baichuan in April 2023 after building his reputation as the former chief executive of Sogou, once China’s second-largest search engine before Tencent bought it in 2021. He recruited former Sogou colleagues and raised $50 million in seed money before the company had shipped a product.

Growth came fast. Baichuan closed a $300 million round in October 2023, then returned nine months later for far more. The Series A close in July 2024 brought in roughly $700 million, pushing Baichuan’s valuation past 20 billion yuan, more than $2.7 billion. Alibaba, Tencent and Xiaomi all wrote checks, alongside municipal AI investment funds tied to local governments.

That valuation made Baichuan China’s second-most valuable AI startup, trailing only Moonshot AI, the Kimi chatbot maker that Alibaba valued at $3 billion around the same time. Alibaba’s own large-model unit has since turned into a rival to both of the startups it helped fund; its Qwen3.8 Max challenging a rival it helped fund shows how tangled the ownership lines have become inside China’s AI sector.

DeepSeek Raises the Stakes With a $71 Billion Ask

Baichuan is not racing alone, and it may not even be racing first. DeepSeek, the Hangzhou-based AI developer, closed its first outside funding round at roughly $7 billion this year. A month later it went back to investors.

The Hangzhou company started planning for an IPO in the mainland and is targeting a filing this year that would allow a 2027 debut, Bloomberg reported, citing people familiar with the discussions. DeepSeek is simultaneously courting a second funding round at a pre-money valuation near $71 billion, about 481 billion yuan and roughly 37% above its prior round.

That gap matters. DeepSeek is now asking public markets to underwrite a company worth more than 25 times Baichuan’s valuation, on the same regulatory runway, in the same target year. Only one of them can set the terms for how investors price an unprofitable Chinese AI lab.

The Contenders Lining Up for China’s AI IPO Wave

Baichuan and DeepSeek are the headline names, but they are not the only Chinese AI developers eyeing a public listing under the loosened rules. A look at where the field stands:

Zhipu AI’s numbers, reported by the newsletter Hello China Tech, illustrate why the old profit-based rules would have locked most of this field out entirely. None of the four unlisted names in that table currently report a profit.

The Government Money With Real Skin in the Game

Behind the corporate investors sits a quieter backer: China’s network of state-directed guidance funds. These vehicles have poured enormous sums into exactly this kind of bet.

China’s government venture capital funds have channeled $912 billion into early-stage strategic firms over the past decade, with 23% of that money reaching roughly 1.4 million AI-related companies, according to a Stanford Freeman Spogli Institute research brief. Local governments were encouraged to treat this capital as patient money, willing to sit through years of losses.

That patience has limits, and cash locked inside private startups eventually needs an exit. Analysts tracking the pattern say the incentive structure creates its own distortions.

inevitably invite companies to chase funding by dressing themselves up as aligned with government priorities

Tilly Zhang, an industrial policy analyst at Gavekal Dragonomics, made that assessment about China’s guidance-fund system in comments reported by CNBC, which described cracks emerging in Beijing’s funding machine. Municipal funds that backed Baichuan alongside Alibaba and Tencent need a way to convert their stakes into cash, and an IPO is the cleanest route available.

Crypto’s AI Trade Loses Its Best Argument

Baichuan has no token, no blockchain protocol and no web3 pivot. It is funded entirely through venture capital and corporate equity, which makes it an odd fit for crypto headlines at first glance.

But it bears directly on one of crypto’s loudest narratives. AI-themed tokens have traded on the promise of exposure to the AI boom for two years, often with little revenue behind them. Baichuan’s single funding round already dwarfs the combined treasury of most AI-crypto projects, and DeepSeek’s $71 billion valuation push makes that gap look almost comedic by comparison.

Public listings change the calculus further. Once Baichuan and DeepSeek trade on a regulated exchange, institutional investors get a direct, audited way to buy AI exposure without touching a token at all. That could quietly erode the case for AI-adjacent coins built mostly on narrative.

What Could Still Break the 2027 Timeline

This is not locked in. Baichuan has not filed anything, and Wang’s own language, advancing plans rather than confirming a date, leaves room to slip. DeepSeek’s second funding round, still being negotiated, could also change how investors price the whole sector before either company reaches a prospectus.

Compute costs are a real constraint too. Rising prices for domestic AI chips, visible in HiSilicon’s recent price increases tied to surging China AI demand, raise the operating losses these companies must explain to public shareholders. A market cap floor of $591 million is a low bar; convincing retail and institutional investors to hold shares in a company still losing money every quarter is a different test entirely.

The broader IPO market is already leaning into AI regardless of how these two listings land, with a record year for AI-linked public offerings across sectors. Wang has not said when Baichuan will file. DeepSeek’s own filing could land within the year, well before Baichuan submits anything at all.