DeepSeek seeks $45 B valuation in first venture round as China backs homegrown AI
Key Points
- DeepSeek is negotiating its first VC round, targeting a valuation of $20‑$45 billion.
- Founder Liang Wenfeng controls about 90% of the company and seeks equity to retain talent.
- The round is expected to be led by the China Integrated Circuit Industry Investment Fund.
- Tencent and Alibaba are reportedly considering participation in the financing.
- DeepSeek’s LLM runs on Huawei chips, aligning with China’s push for AI self‑sufficiency.
- Open‑weight model on Hugging Face has attracted a global developer community.
- Valuation, if achieved, would rank DeepSeek among the world’s most valuable AI startups.
Chinese AI lab DeepSeek is in talks to raise its first venture‑capital round, aiming for a valuation that could climb from $20 billion to $45 billion. Founder Liang Wenfeng, who controls about 90% of the company, is turning to investors after rival firms began poaching key researchers. The round is expected to be led by the state‑backed China Integrated Circuit Industry Investment Fund, with cloud giants Tencent and Alibaba reportedly considering participation. DeepSeek’s efficient large‑language model runs on Huawei chips, positioning it as a strategic asset in Beijing’s push for AI independence.
DeepSeek, the Chinese artificial‑intelligence laboratory that burst onto the scene in early 2025, is negotiating its first venture‑capital round. Sources say the company could secure a valuation between $20 billion and $45 billion, a steep rise that reflects both its technical achievements and Beijing’s strategic interest in homegrown AI.
The lab’s flagship large‑language model distinguishes itself by delivering reasoning and coding capabilities comparable to leading U.S. models while consuming a fraction of the compute power and cost. By publishing its weights openly on Hugging Face, DeepSeek has cultivated a developer community that values transparency and accessibility.
Liang Wenfeng, a hedge‑fund billionaire who founded DeepSeek and retains nearly 90% ownership, has never before sought external capital. That changed after rival firms began courting DeepSeek’s top engineers. “We need to give our people a stake in the company,” insiders told the Financial Times. Offering equity, the founders hope to stem the talent drain and keep the research team intact.
The forthcoming round is expected to be led by the China Integrated Circuit Industry Investment Fund, a state‑owned vehicle tasked with bolstering the nation’s semiconductor and AI sectors. Bloomberg reports that both Tencent and Alibaba are in talks to join, signaling broad corporate backing for the venture.
DeepSeek’s hardware strategy dovetails with the fund’s objectives. The lab has optimized its models to run on chips produced by Huawei Technologies, China’s leading telecom and semiconductor maker. The combination of a powerful AI model and domestically sourced hardware is viewed as a cornerstone for a self‑reliant AI ecosystem that can operate without reliance on U.S. chip technology.
While DeepSeek declined immediate comment, the company’s trajectory underscores a larger shift in China’s AI landscape. The government’s push to fund indigenous AI aims to circumvent export controls and supply‑chain vulnerabilities that have hamstrung U.S.‑based firms. By aligning cutting‑edge research with national hardware capabilities, DeepSeek positions itself as a flagship project in that effort.
Analysts note that the valuation range, if realized, would place DeepSeek among the world’s most valuable AI startups, despite its relatively short operating history. The potential influx of capital could accelerate model development, expand the team, and deepen partnerships with cloud providers, further embedding the lab in China’s digital infrastructure.
Investors appear eager to back a venture that promises both commercial returns and strategic relevance. As the round moves forward, the eyes of the global AI community will be on DeepSeek’s ability to scale its technology while navigating the geopolitical currents that shape today’s tech industry.