DeepSeek, an AI startup, is considering expanding its latest funding round to as much as 100 billion yuan ($14.9 billion), doubling its earlier target, due to strong interest from state-backed funds and corporate investors, according to sources familiar with the matter [1]. The company initially set a 50 billion yuan target for the round, but the fundraising process remains fluid and the final amount could still change before talks conclude [1]. DeepSeek is closely vetting prospective investors, largely limiting participation to government and corporate funds, and turning away private investment funds raised from individual investors [1].
Bloomberg previously reported that DeepSeek is close to securing at least 80 billion yuan, with Tencent and battery maker CATL among the largest backers, and is considering an IPO in early 2027 [1]. In the current round, CATL, Geely Auto, Monolith Management, and Loyal Valley Capital have committed capital, according to one source, though none of these companies responded to CNBC's requests for comment [1]. The round, initially expected to close by the end of August, has taken longer than planned as some investors wavered over the price, but talks are nearing completion [1]. DeepSeek is seeking a valuation of about 500 billion yuan ($75 billion) in this round, compared to a roughly 350 billion yuan valuation implied by its first external funding round, which closed in June and raised about 50 billion yuan [1].
The company triggered a sell-off in U.S. tech stocks in January 2025 after releasing AI models that rivaled American peers at a far lower cost [1]. Its latest model, V4.1 Flash, was released in September and is designed for greater capability and faster inference, according to the company [1]. Founder Liang Wenfeng told investors in July that his priority is advancing the technology toward artificial general intelligence rather than maximizing profit [1]. Talks on the current round were briefly suspended after Liang reportedly stated that Chinese AI companies still lagged far behind their U.S. counterparts and relied heavily on Nvidia chips [1].
DeepSeek has engaged CITIC Securities to prepare for a possible IPO on Shanghai's STAR Market, according to Reuters [1]. The company's decision to open up to external funding is seen as a sign of the ballooning capital demand in the AI sector and the mounting pressure to retain talent amid intensifying competition [1].
CONCLUSION
DeepSeek's potential $14.9 billion funding round underscores surging investor interest in China's AI sector, especially from state-backed and corporate funds. The company's rapid valuation growth and plans for a possible IPO highlight its ambition and the competitive pressures in the industry. Market participants are closely watching DeepSeek's fundraising and technology developments for broader implications in the AI and tech sectors.