- Fundraising plan draws strong interest despite limited revenue
- Deal talks highlight competition among China’s tech giants in AI
China’s DeepSeek (深度求索) is seeking its first external funding round at a valuation exceeding $20 billion, with Tencent and Alibaba Group among potential investors, according to people familiar with the matter.
The startup, which has focused on open-source large language models, is aiming to raise at least $300 million in what would mark its first outside financing.
Earlier discussions had suggested a baseline valuation of $10 billion, though negotiations remain ongoing and final terms could still change.
The fundraising has drawn strong interest from investors, even as debate grows over the company’s valuation given its limited commercialization.
DeepSeek has yet to generate meaningful revenue and continues to offer its models and consumer-facing applications for free, positioning itself more as a research-driven, open AI lab.
The company did not respond to requests for comment, nor did Tencent or Alibaba.
DeepSeek’s valuation has been partly benchmarked against peers such as Moonshot AI, which is reportedly finalizing a new funding round at about $18 billion.
Other domestic players, including MiniMax and Zhipu AI, have already listed in Hong Kong this year, with valuations exceeding $30 billion and $50 billion respectively.
Investors said large technology firms and state-backed funds are leading contenders for allocation in what is expected to be a tightly contested round.
Tencent and Alibaba have already backed several top Chinese AI startups, and a stake in DeepSeek could help diversify their AI portfolios while opening the door to deeper technical collaboration.
