DeepSeek is in advanced talks to raise up to 50 billion yuan ($7.35 billion) in what would be the largest single funding round for a Chinese artificial intelligence company, according to reports from The Information and Reuters. The funding could value the previously self-funded startup at as much as $50 billion, a significant increase from an estimated $10 billion just weeks ago.
China’s National Artificial Intelligence Industry Investment Fund, an $8.8 billion state-backed vehicle established in early 2025, is negotiating to lead the funding round. The China Integrated Circuit Industry Investment Fund, known as “Big Fund III,” is also involved, aiming to support domestic semiconductor and AI independence from U.S. technology.
Additionally, Tencent and Alibaba are in discussions to participate in the funding round, with Tencent proposing to acquire up to a 20% stake. However, DeepSeek founder Liang Wenfeng, who controls nearly 90% of the company, is hesitant to relinquish significant ownership. Liang plans to invest up to 20 billion yuan ($2.94 billion) personally in this round.
Founded by Liang, a hedge fund billionaire, DeepSeek gained attention by developing AI models that utilize chips from Huawei Technologies rather than U.S. semiconductor technology. The Hangzhou-based lab had previously rejected outside capital throughout its existence.
Reports indicate that the valuation of DeepSeek surged from initial discussions of $10 billion to $30 billion, and then to approximately $50 billion due to heightened state interest. This acceleration aligns with Beijing’s strategy to establish DeepSeek as a key player in its AI ambitions.
Proceeds from the funding will be allocated towards expanding computing infrastructure and enhancing employee compensation. Sources indicated that a significant motivation for the raise is to offer equity stakes to employees amid a competitive market for talent, as researchers from DeepSeek have faced poaching by other firms.
DeepSeek also intends to speed up commercialization efforts and model releases, with an upgraded V4.1 model expected in June. If the funding round achieves its projected scale, it would surpass other recent AI fundraises in China, positioning DeepSeek among the world’s most valuable AI startups.
