DeepSeek seeks up to $7.35B in record Chinese AI fundraise at $50B valuation

A Record-Breaking Chinese AI Fundraise

Chinese AI laboratory DeepSeek is in advanced negotiations to raise up to 50 billion yuan, approximately $7.35 billion, in what would be the largest single funding round ever for a Chinese artificial intelligence company. The deal could value the Hangzhou-based startup at as much as $50 billion, a staggering jump 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 talks to lead the round. The fund, commonly known as Big Fund III, serves as Beijing's primary instrument for fostering domestic semiconductor and AI independence from US technology. Tencent and Alibaba are also in discussions to participate, with Tencent reportedly proposing a 20% stake, though founder Liang Wenfeng has resisted ceding that much control. Liang, who owns nearly 90% of the company, plans to invest up to 20 billion yuan personally.

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 lab gained global attention by developing frontier AI models optimised to run on Huawei chips rather than restricted US semiconductors. The valuation surged from initial discussions of $10 billion to $30 billion and then to approximately $50 billion as state interest intensified, reflecting Beijing's decision to position DeepSeek as a central bet in its frontier AI ambitions.

Funds Earmarked for Compute and Talent Retention

The proceeds will be directed towards expanding computing infrastructure and improving employee compensation. A key motivation was the need to offer staff equity stakes, as competitors had been poaching DeepSeek researchers. The company has informed investors it plans to accelerate commercialisation and model releases, with an upgraded V4.1 model expected in June. If completed at the reported scale, the round would dwarf recent AI fundraises in China and place DeepSeek among the world's most valuable AI startups, alongside US rivals backed by tens of billions in capital.