Chinese AI lab DeepSeek is in advanced talks to raise up to 50 billion yuan ($7.35 billion) in what would be the largest single funding round ever for a Chinese artificial intelligence company, according to reports from The Information and Reuters. The round could value the previously self-funded startup at as much as $50 billion, a figure that has ballooned from just $10 billion only weeks ago.
State-Backed Fund Takes the Lead
China’s National Artificial Intelligence Industry Investment Fund — an $8.8 billion state-backed vehicle established in early 2025 — is in advanced negotiations to lead the round, the Financial Times first reported. The China Integrated Circuit Industry Investment Fund, commonly known as “Big Fund III,” is the government’s primary instrument for fostering domestic semiconductor and AI independence from U.S. technology.
Tencent and Alibaba are also in discussions to participate, according to Bloomberg. Tencent had initially proposed acquiring up to a 20% stake, though DeepSeek founder Liang Wenfeng — who controls nearly 90% of the company — has been reluctant to cede that level of ownership. Liang himself plans to invest up to 20 billion yuan ($2.94 billion) personally in the round.
From Bootstrapped Lab to National Champion
The fundraise marks a dramatic reversal for DeepSeek, which had rejected outside capital throughout its existence. Founded by Liang, a hedge fund billionaire, the Hangzhou-based lab gained global attention by developing frontier AI models optimized to run on chips made by Huawei Technologies rather than restricted U.S. semiconductors.
The Wall Street Journal reported that the valuation surged from initial discussions of $10 billion to $30 billion and then to approximately $50 billion as state interest intensified. The rapid escalation reflects Beijing’s decision to position DeepSeek as a central bet in its frontier AI ambitions.
Funds Earmarked for Compute and Talent Retention
According to Reuters, the proceeds will be directed toward expanding computing infrastructure and improving employee compensation. Sources told the Financial Times that a key motivation was the need to offer employees equity stakes, as competitors had been poaching DeepSeek researchers. The company has also informed investors it plans to accelerate commercialization and model releases, with an upgraded V4.1 model expected in June.
The round, if completed at the reported scale, would dwarf recent AI fundraises in China and place DeepSeek among the world’s most valuable AI startups alongside U.S. rivals backed by tens of billions in capital.
