IMPLICATOR
DeepSeek's valuation has climbed from $10 billion to as much as $50 billion in three weeks. The Hangzhou-based AI lab is now raising $3 billion to $4 billion in its first external round, with China's state-backed National Artificial Intelligence Industry Investment Fund ($8.8 billion in capital) lined up as lead investor and Tencent Holdings in parallel participation talks, three people familiar with the matter said this week. The new capital would fund computing infrastructure and employee benefits as DeepSeek faces deeper-pocketed domestic rivals.
Key Takeaways
- DeepSeek's valuation has climbed fivefold from $10 billion to as much as $50 billion in three weeks.
- China's state-backed Big Fund III is lined up to lead the $3-4 billion round, with Tencent Holdings in participation talks.
- Liang Wenfeng opened the round after rivals poached researchers, consolidating his stake to roughly 84% in April.
- V4 launched without the global market reaction R1 triggered in 2025, indicating Chinese rivals have caught up.
AI-generated summary, reviewed by an editor. More on our AI guidelines.
State investors take the lead
The proposed lead investor is the China Integrated Circuit Industry Investment Fund, the state vehicle known as the "Big Fund," which has financed China's semiconductor self-sufficiency push since 2014. AI-focused affiliates under its third phase are backing DeepSeek's financing, according to the South China Morning Post on Thursday, citing three people familiar with the discussions.
The Financial Times first reported the negotiations Wednesday at a $45 billion valuation. Reuters put the upper bound at $50 billion the same day, and the Wall Street Journal cited the same figure, per a summary published on Investing.com.
Sources differ on Hillhouse Capital's involvement. The SCMP wrote that the global investment firm was part of the discussions; a Hillhouse spokesman told the paper the firm was not making an investment. Tencent, the Big Fund and DeepSeek did not respond to requests for comment.
A reversal for the self-funded lab
Founder Liang Wenfeng is directly involved in the fundraising, the people told Reuters. He has run DeepSeek as a research lab funded from his quantitative hedge fund High-Flyer Capital Management. Liang controls roughly 84% of the company, per regulatory filings cited by TNW.
Get Implicator.ai in your inbox
Strategic AI news from San Francisco. No hype, no "AI will change everything" throat clearing. Just what moved, who won, and why it matters. Daily at 6am PST.
No spam. Unsubscribe anytime.
Liang opened the round to offer employees equity after rivals poached DeepSeek researchers, sources told the Financial Times. Reuters cited the departure last year of Luo Fuli, who left to lead Xiaomi's MiMo model team. In April, Liang lifted DeepSeek's registered capital by 50% and consolidated his shareholding ahead of accepting outside money, Yicai Global disclosed.
V4 launched without the V3 market reaction
DeepSeek introduced V4 on April 24 and called it state-of-the-art among open-source systems. Third-party evaluations placed it behind the strongest U.S. and Chinese systems, Reuters wrote. The release did not repeat the global tech-share selloff that V3 and R1 triggered in early 2025, when R1's reported $6 million training cost was an order of magnitude below U.S. peers, per TNW.
Compute-heavy agent workloads have replaced chatbot benchmarks as the industry focus, while ByteDance, Alibaba, MiniMax and Moonshot AI have raised billions to keep pace. Stanford's AI Index in March put the gap between the top U.S. model and its strongest Chinese competitor at 2.7 percentage points, according to Quartz.
What the round signals
SCMP sources said the final valuation could still change as negotiations continue. If the round closes near the reported range, DeepSeek's funding base would shift from High-Flyer's balance sheet to state-linked capital, opening closer ties to central-government procurement and state-owned-enterprise demand, per TNW. Bloomberg first reported on April 22 that Tencent and Alibaba were in talks at the $20 billion stage. TNW flagged Alibaba's continued participation at the higher valuation as one of the open questions.
Frequently Asked Questions
How much is DeepSeek raising and at what valuation?
DeepSeek is raising $3 billion to $4 billion in its first external funding round at a valuation of up to $50 billion, three people familiar with the matter said this week. The valuation climbed from an initial $10 billion across three weeks. The Financial Times first reported the talks Wednesday at $45 billion; Reuters and the Wall Street Journal then put the upper bound at $50 billion.
Who is leading the round?
China's state-backed National Artificial Intelligence Industry Investment Fund, known as the Big Fund III, is in line to lead. Tencent Holdings has held parallel participation talks. The South China Morning Post reported that AI-focused affiliates under the fund's third phase are backing the financing. Hillhouse Capital was named in earlier reports but a spokesman told the SCMP the firm is not investing.
Why is DeepSeek raising money now after years of self-funding?
Sources told the Financial Times that founder Liang Wenfeng opened the round to offer employees equity after rivals poached DeepSeek researchers. Reuters cited the 2025 departure of Luo Fuli to Xiaomi's MiMo team. Liang lifted DeepSeek's registered capital by 50% in April and consolidated his shareholding to roughly 84% ahead of accepting outside money, Yicai Global disclosed.
How did V4 perform compared to V3 and R1?
DeepSeek introduced V4 on April 24 and called it state-of-the-art among open-source systems. Third-party evaluations placed it behind the strongest U.S. and Chinese systems, Reuters wrote. The release did not repeat the global tech-share selloff that V3 and R1 triggered in early 2025, when R1's reported $6 million training cost was an order of magnitude below U.S. peers, per TNW.
What does state-backed funding mean for DeepSeek's future?
If the round closes near the reported range, DeepSeek's funding base would shift from High-Flyer's balance sheet to state-linked capital, opening closer ties to central-government procurement and state-owned-enterprise demand, per TNW. Stanford's AI Index in March put the gap between the top U.S. model and its strongest Chinese competitor at 2.7 percentage points, according to Quartz.
AI-generated summary, reviewed by an editor. More on our AI guidelines.
Marcus Schuler
Editor-in-Chief and founder of Implicator.ai. Former ARD correspondent and senior broadcast journalist with 10+ years covering tech. Writes daily briefings on policy and market developments. Based in San Francisco. E-mail: [email protected]
