June 3 - DeepSeek, a Chinese artificial intelligence startup that rose to prominence last year after its V3 and R1 model releases, is preparing to raise about 50 billion yuan in its first institutional funding round, according to people briefed on the matter. The backers under discussion include major technology and industrial groups, and the proposed transaction would value the company after the investment at between 350 billion yuan and 400 billion yuan.
Insiders who spoke on condition of anonymity because the talks are confidential said the company founder, Liang Wenfeng, has pledged 20 billion yuan of his own capital to the round. Tencent is considering a commitment of 10 billion yuan and battery maker CATL is examining a 5 billion yuan investment. If those numbers hold, Tencent and CATL would rank as the largest external investors in the financing.
Sources said DeepSeek is also in advanced discussions with the national artificial intelligence fund, gaming developer NetEase and e-commerce firm JD.com. The number of participants being planned for the round is expected to be fewer than ten investors overall.
The proposed investor list further includes Hong Kong-headquartered IDG Capital and Monolith Capital as prospective participants, sources added. IDG declined to comment and Monolith did not respond to a request for comment. DeepSeek, Liang, NetEase, JD.com and the China Integrated Circuit Industry Investment Fund, which is the primary backer of the national AI fund, did not immediately respond to requests for comment. Tencent and CATL declined to comment.
Strategic context
DeepSeek emerged as a focal point for China AI capability last year when its V3 and R1 models won significant acclaim internationally, including attention in Silicon Valley. That recognition contributed to the company being characterized as a national AI champion.
CATL, widely known for its leading role in electric-vehicle battery supply chains, has been extending its business into the AI data centre space, exploring opportunities to supply power equipment and energy storage solutions as demand for stable, large-scale power grows with rising AI workloads. For Tencent, a closer relationship with DeepSeek could augment its own model initiatives - Tencent has been promoting its Hunyuan model but is reported to be trailing domestic competitors such as ByteDance's Doubao and DeepSeek. A partnership may help Tencent keep pace with rivals prioritizing in-house models, including Alibaba's Qwen.
Deal timing and caveats
People familiar with the negotiations said DeepSeek aims to close the round within the next couple of weeks, while also cautioning that financial terms could still be revised as discussions continue. The startup has not made any statements about potential plans for an initial public offering in the future.
Market reaction and implications
The financing effort highlights efforts by Chinese technology and industrial actors to build capabilities across the AI value chain - from model development to the energy infrastructure required to operate large-scale models. The mix of strategic corporate investors and state-linked funds under consideration in the round underscores a combined private and public push to bolster domestic AI capacity.
Key takeaways
- DeepSeek is targeting about 50 billion yuan in its maiden funding round and would be valued at 350-400 billion yuan post-investment if the terms hold.
- Founder Liang Wenfeng has committed 20 billion yuan; Tencent and CATL are set to be the largest external investors with potential commitments of 10 billion yuan and 5 billion yuan respectively.
- Other prospective participants include the national AI fund, NetEase, JD.com, IDG Capital and Monolith Capital; total number of investors planned is fewer than ten.
All figures and participant lists are based on people with knowledge of the matter who requested anonymity due to the confidential nature of the talks.