China’s DeepSeek looks to tap external investors including Alibaba, Tencent

Subscribe to enjoy similar stories.Chinese artificial-intelligence startup DeepSeek is tapping external investors for the first time since it became a household name, looking to raise funds for research and development, people familiar with the matter said.In recent weeks, DeepSeek has held talks with potential investors, including Chinese technology giants Alibaba and Tencent, seeking to raise at least $300 million, the people said. The funds will be denominated in Chinese yuan, they said.Beijing-based venture-capital firm Shunwei Capital—backed by Lei Jun, founder of Chinese consumer-electronics maker Xiaomi—has also held talks with the AI startup, some of the people said.Preliminary discussions value the Chinese AI heavyweight at between $10 billion and $30 billion, the people said.

Several prospective investors are benchmarking DeepSeek against another Chinese AI startup, Moonshot AI, which was valued at $18 billion in its latest financing round, some of the people said.DeepSeek hasn’t raised outside funds from investors even after it turned heads in Silicon Valley and Wall Street with a powerful AI model early last year that rivaled those of titans such as OpenAI. So far, the Hangzhou-based firm has been largely bankrolled by founder Liang Wenfeng’s own cash and profit from High-Flyer, the hedge fund that he co-founded.Investors have struggled to put a price on DeepSeek, mainly because the startup, derived from an AI lab at High-Flyer, has focused on open-source AI technologies but hasn’t established a proven revenue model, the people said.Some investors are pegging DeepSeek’s worth to its long-awaited next-generation AI model, some of the people said.