Chinese AI startup DeepSeek is reportedly in discussions to raise its first venture capital funding round, with the company’s potential valuation rising from about $20 billion to as high as $45 billion within a matter of weeks, according to reports from the Financial Times and Bloomberg.
DeepSeek gained international attention earlier this year after releasing a large language model that the company said was trained using significantly less computing power and lower costs than leading U.S. AI systems developed by companies such as OpenAI and Anthropic.
The company has continued to improve its models in areas including reasoning and coding while also keeping versions of its systems available as open-weight models through platforms such as Hugging Face.
DeepSeek was founded by Chinese hedge fund billionaire Liang Wenfeng, who reportedly controls nearly 90% of the company.
According to the Financial Times, DeepSeek had previously avoided raising outside capital. Sources cited by the publication said Liang decided to pursue funding after competitors began attempting to recruit DeepSeek researchers. The new funding would reportedly help the company offer equity incentives to employees.
Chinese State-Backed Investors Reportedly Involved
Bloomberg reported that the funding round is expected to be led by China Integrated Circuit Industry Investment Fund, a state-backed investment vehicle focused on semiconductor and technology development.
China has increasingly invested in domestic AI and semiconductor companies as the country faces restrictions on access to advanced U.S. chip technology.
DeepSeek’s models have reportedly been optimized to run on processors produced by Huawei Technologies, one of China’s largest hardware companies.
The combination of domestically developed AI software and Chinese-made hardware is viewed as strategically important for China’s efforts to strengthen its own AI ecosystem and reduce dependence on U.S. technology providers.
Bloomberg also reported that Chinese technology companies Alibaba Group and Tencent Holdings are in talks to participate in the funding round.
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