- Founder Liang Wenfeng remains firmly in control through unusual ownership structure
- Valuation jumps fivefold in two months as investors race into China’s AI sector
Chinese AI startup DeepSeek has completed its first external fundraising round since its founding, securing more than 50 billion yuan ($7.4 billion) at a valuation exceeding $50 billion, according to a report by The Information.
The financing is the largest single funding round ever disclosed for a Chinese AI company and marks a major shift for DeepSeek.
The Hangzhou-based large language model champion had previously relied entirely on internal funding from quantitative hedge fund High-Flyer, its incubator and controlling shareholder.
The round employed an unusual structure designed to preserve founder control.
20 billion yuan out of Liang’s own pocket
According to the report, founder Liang Wenfeng personally contributed 20 billion yuan, making him the largest investor.
Other participants included Tencent with 10 billion yuan, CATL with 5 billion yuan, and JD.com, NetEase and IDG Capital with 3 billion yuan each.
China’s National AI Industry Investment Fund invested 1 billion yuan directly into DeepSeek.
The disclosed investments account for 45 billion yuan, suggesting additional investors may have participated.
Previous reports have linked firms including Monolith Capital, Loyal Valley Capital and Beijing-based Shixiang Technology to the round, although their commitments were not detailed.
Routed into a limited partnership
Under the structure, all external capital except that of the state-backed AI fund is routed into a limited partnership managed by Liang rather than directly into DeepSeek itself.
Investors receive no voting rights and are subject to a five-year lockup period during which their holdings cannot be transferred.
The National AI Industry Investment Fund is the sole exception. Its investment was made directly into DeepSeek, giving it voting rights and exemption from the lockup restrictions.
People close to Liang told The Information that the five-year lockup was intended to filter out investors seeking quick exits.
DeepSeek’s management also reportedly required verification of the ultimate limited partners behind participating funds to avoid ownership ending up in unidentified entities.
Control comes first
Founded in July 2023, DeepSeek was incubated by High-Flyer and for much of its existence operated without outside capital.
Research spending, computing infrastructure and model development were financed through High-Flyer’s own resources.
That model became increasingly difficult to sustain as training costs rose and competition for top AI talent intensified.
The new capital is expected to support model training, inference services, commercialization efforts as well as retain and recruit top talent.
Valuation surges
The financing also highlights the rapid reassessment of China’s AI sector by investors.
DeepSeek was reportedly seeking funding at a valuation of roughly $10 billion when fundraising discussions began in April.
Just two months later, its valuation has climbed beyond $50 billion, underscoring growing investor interest in Chinese foundation-model developers and the commercial potential of domestically developed AI technologies.
