- State-backed semiconductor fund in talks to lead first external round for AI startup, signaling shift from hardware to full-stack AI support
- DeepSeek founder increases stake to 34%, while potential investors include top internet and state-backed funds
DeepSeek, one of China’s top AI startups, is in discussions with the state-backed National Integrated Circuit Industry Investment Fund, known as the Big Chip Fund, over a potential first external financing round, with a post-money valuation around $45 billion, according to multiple reports.
If concluded, it would mark the fund’s first public investment in a domestic large-model AI company, reflecting a broader strategy shift from hardware-focused support to integrated hardware-software ecosystems.
DeepSeek’s founder Liang Wenfeng, a Zhejiang University alumnus, previously kept the company fully self-funded under quantum fund High-Flyer, showing little interest in outside investors.
Industry sources said that this marks a significant pivot in the domestic AI funding landscape, with state capital inflows into large language model (LLM) firms signaling that technology execution, rather than storytelling, is becoming the key to attracting investment.
Beyond the Big Chip Fund, talks reportedly include major internet players such as Alibaba and Tencent, alongside other state-backed investors. All parties are keeping negotiations private, and the final roster of investors has yet to be confirmed.
Founded in July 2023, DeepSeek has gained global traction with its DeepSeek-V3 and V4 model series, claiming users in 140 countries.
The funding, if closed, is expected to expand computing resources, retain top talent through competitive compensation, and support further research and large-scale deployment.
Accelerating maturation or asserting state control?
On April 27, just before the financing news surfaced, Liang increased his direct ownership in DeepSeek from 1% to 34%, strengthening his control over the company.
The round comes amid intensifying domestic competition, with ByteDance, Baidu, Alibaba, and Tencent all accelerating in-house LLM development.
Moonshot, another of the so-called “four LLM dragons”—the others being DeepSeek, MiniMax and Zhipu AI—and producer of the popular AI tool Kimi, is set to raise $2 billion in a fresh financing round at a post-money valuation above $20 billion.
Industry observers note that the Big Chip Fund’s involvement could accelerate the maturation of China’s AI ecosystem, linking state capital with high-end private technology ventures to drive both technical depth and commercial expansion.
Analysts, however, view the potential investment in a leading domestic LLM firm as a signal of Beijing’s intent to maintain oversight of China’s AI ecosystem, particularly after its blocking of Meta’s acquisition of the AI agent Manus sent ripples through the global AI community.
