DeepSeek Seeks $300M in First Outside Funding Round at $10B+ Valuation

DeepSeek Opens Doors to Outside Capital

DeepSeek, the Chinese artificial intelligence startup that rattled global tech markets in early 2025 with its cost-efficient R1 reasoning model, is pursuing its first external funding round. The company aims to raise at least $300 million at a valuation of $10 billion or more, according to a report from The Information.

From Self-Funded to Seeking Investors

Founded in 2023 by Liang Wenfeng, DeepSeek had long resisted outside investment to avoid pressure to commercialise prematurely. The company instead drew on profits from its parent, High-Flyer Capital Management, one of China's top-performing quantitative hedge funds. High-Flyer posted an average return of 56.6% across its funds in 2025, potentially generating over $700 million in fees that year alone.

But surging demand following the R1 model's release strained DeepSeek's infrastructure, pushing the company toward external capital to fund AI chips, servers, and ongoing model development.

A Fraction of US Rivals' Valuations

Even at $10 billion, DeepSeek's valuation would be a fraction of its American competitors. OpenAI closed a funding round in early 2026 at a valuation exceeding $700 billion, while Anthropic and xAI have also raised billions. Despite its relatively modest valuation, DeepSeek has earned outsized attention for delivering competitive model performance at dramatically lower costs, with its R1 model reportedly trained for roughly $6 million using older Nvidia H800 chips.

V4 Model on the Horizon

DeepSeek is also preparing to launch its next-generation V4 model, a roughly 1 trillion parameter Mixture-of-Experts system expected to arrive in late April 2026. Notably, V4 is set to run on Huawei's Ascend 950PR chips, making it the first frontier AI model built entirely on Chinese semiconductor infrastructure. Internal tests suggest its coding capabilities could surpass offerings from OpenAI and Anthropic.

Industry Implications

The fundraise signals that even the most capital-efficient AI labs are feeling the financial pressure of the escalating AI race. How DeepSeek balances its tradition of independence with the demands of outside investors will be closely watched across the industry.