Business

DeepSeek Slated to Raise $7 Billion in Maiden Funding Round
By Reuters | 03 Jun, 2026

China's best-known AI startup is set to raise about 50 billion yuan ($7.4 billion) from Tencent Holdings, CATL and others, valuing the company at between $52 and $59 billion.

DeepSeek, China's best-known AI startup, is set to raise about 50 billion yuan ($7.4 billion) in its first funding round from investors including Tencent Holdings and CATL, people with knowledge of the matter said.

The fundraising could value the company after the investment at between 350 billion yuan and 400 billion yuan, or between $52 billion and $59 billion, the people said, declining to be identified because the information is confidential.

DeepSeek became China's national AI champion and garnered global fame early last year, when its V3 and R1 models drew widespread praise in Silicon Valley and challenged U.S. assumptions about China's AI capabilities.

The funding round marks a reversal of DeepSeek's years-long strategy of not seeking outside capital, a policy enabled by founder Liang Wenfeng's quant hedge fund High-Flyer.

But the fast-moving AI industry has expanded beyond the low-cost, open-source chatbot models that powered DeepSeek's breakthrough. Instead the focus is now on AI agents that can perform more complex tasks with less human intervention than chatbots, while requiring significantly more computing power.

DeepSeek said in April that its next-generation, agent-focused V4 model redefined the state-of-the-art for open-source models, but third-party evaluations suggest it lags the best models from some U.S. and Chinese competitors.

The funding round ranks among China's largest private tech fundraisings. Even so, it pales in comparison to the $65 billion raised by Anthropic last month and the $122 billion raised by OpenAI in March - both of which benefit from massive fluid Western capital markets.

DeepSeek faces geopolitical constraints that confine its fundraising largely to China and also dictate its corporate and hardware strategies, said Alfredo Montufar-Helu, a Beijing-based managing director at Ankura China Advisors.

"Western export bans mean DeepSeek cannot access frontier American silicon. Without the ability to buy that hardware, they have no reason to match the multi-billion-dollar computing budgets of their U.S. rivals," he added.

TENCENT, CATL SET TO BE BIGGEST EXTERNAL INVESTORS

Founder Liang has committed 20 billion yuan of his own money in this funding round, the people said. They added that tech conglomerate Tencent is considering 10 billion yuan and battery giant CATL is looking at 5 billion yuan, which would make them the largest external investors.

DeepSeek is also in final talks with China's national artificial intelligence fund, gaming developer NetEase and e-commerce giant JD.com, they said, noting that the planned number of investors was fewer than 10.

DeepSeek, Liang, NetEase, JD.com and the China Integrated Circuit Industry Investment Fund, which is the main backer of the national AI fund, did not immediately respond to Reuters' requests for comment. Tencent and CATL declined to comment.

The line-up underscores China's efforts to build an increasingly self-sufficient AI industry, from models to the energy infrastructure needed to power them.

CATL, best known as a dominant supplier in the electric vehicle battery supply chain, has recently pushed into AI data centres, exploring opportunities to provide power equipment and energy storage solutions as AI workloads drive demand for large-scale, reliable power.

Tencent has sought to promote its own AI model, Hunyuan, but trails domestic market leaders including ByteDance's Doubao and DeepSeek. A closer relationship with DeepSeek could help Tencent keep pace with rival Alibaba, which has prioritised its in-house Qwen AI model.

OTHER INVESTORS IN THE MIX

DeepSeek is expected to complete the round within the next couple of weeks, said the people, cautioning that financial details and the investor line-up could still change.

While OpenAI and Anthropic are both planning initial public offerings, DeepSeek has to date not made any statements about any future listing plans.

Hong Kong-headquartered IDG Capital and Monolith Management are also among the prospective investors, the people said.

IDG declined to comment while Monolith did not respond to a request for comment.

(Reporting by Reuters staff; Editing by Edwina Gibbs)