DeepSeek in talks for funding at potential $45 billion valuation

According to reports from the Financial Times and Bloomberg, Chinese artificial intelligence lab DeepSeek is in talks to raise its first round of venture capital. The potential valuation of the company could hit $45 billion, representing a significant increase from its previous potential valuation of $20 billion. The startup came to prominence in early 2025 after launching a large language model that trained on a fraction of the compute power and cost of models from U.S. competitors like OpenAI and Anthropic. DeepSeek has since kept pace with top models in areas like reasoning and coding while remaining open weight, meaning versions of its AI models are freely available on platforms like Hugging Face.

The company was founded by Liang Wenfeng, a hedge fund billionaire who currently controls nearly 90% of the company. Historically, the lab has not sought outside investment. However, faced with competitors poaching DeepSeek’s researchers, Liang has opted to raise funds. The primary purpose of raising this capital is to offer employees shares in the company, allowing the firm to retain its key researchers amid intense competition for talent.

The proposed funding round is reportedly drawing significant interest from both state-backed entities and major technology firms. According to Bloomberg, the investment group is said to be led by a state investment vehicle, with participation from major cloud companies:

• China Integrated Circuit Industry Investment Fund: A state investment vehicle said to be leading the funding round.
• Tencent: A cloud giant reportedly in talks to participate.
• Alibaba: A cloud giant also reportedly in talks to participate.

The participation of these entities aligns with broader efforts within China to fund homegrown AI technology. This strategic push is designed to reduce reliance on U.S. technology, particularly chips. DeepSeek’s models have been optimized to run on chips made by hardware provider Huawei Technologies, creating a domestic hardware-and-software combination that supports China’s efforts to develop AI capabilities to rival the United States.

Why it matters

DeepSeek’s funding round highlights the intense competition for AI talent and China’s strategic push to build a sovereign AI ecosystem that operates independently of U.S. technology and chips.