DeepSeek raises $7.4 billion at $50 billion+ valuation in landmark AI funding round

The global AI race just entered a new phase, and one of China’s most closely watched startups is making its biggest move yet.

DeepSeek has raised more than 50 billion yuan, or about $7.4 billion, at a valuation exceeding $50 billion in its first major funding round, according to a report from The Information. The deal ranks among the largest private AI financings in China and signals growing confidence in the startup that stunned Silicon Valley with its low-cost AI models.

“Chinese AI lab DeepSeek has closed its first funding round that raised more than 50 billion yuan ($7.4 billion) under an unusual deal structure,” The Information reported, citing two people with direct knowledge of the matter.

The fundraising comes at a pivotal moment for the AI industry. Companies across the globe are pouring billions into chips, data centers, and energy infrastructure as competition shifts beyond chatbots and into AI agents capable of carrying out increasingly complex tasks with less human input.

DeepSeek’s financing stands out for another reason. The company structured the round to keep control firmly in the hands of founder and CEO Liang Wenfeng.

DeepSeek adopts a founder-controlled structure to preserve Liang Wenfeng’s voting power

According to The Information, investors were required to invest in a limited partnership managed by Liang rather than invest directly in DeepSeek itself. Investors reportedly agreed to a five-year lock-up period and will not receive voting rights.

“The funding round, which values the large-language model developer at more than $50 billion, requires investors to put their capital into a limited partnership managed by DeepSeek CEO Liang Wenfeng, instead of DeepSeek itself, as a way for Liang to ensure he retains absolute control of the company, the people added. It also imposes a five-year lockup on all investors’ shares, during which they can’t sell their stakes,” The Information added, citing the people.

China’s National Artificial Intelligence Industry Investment Fund is the lone exception. The state-backed fund invested directly in DeepSeek and retained voting rights without being subject to the lock-up restrictions.

The structure mirrors a growing trend among elite AI startups whose founders are seeking access to large pools of capital without giving up strategic control of their companies.

The funding round follows earlier reports from TechStartups that Liang planned to contribute 20 billion yuan of his own capital, accounting for roughly 40% of the raise. People familiar with the discussions said that Chinese technology giant Tencent is considering a 10 billion yuan investment, while battery maker CATL is exploring a 5 billion yuan commitment. If finalized, the two companies would become DeepSeek’s largest outside investors.

The startup is reportedly in advanced talks with several other investors, including China’s national AI fund, gaming company NetEase, e-commerce giant JD.com, Hong Kong-based IDG Capital, and Monolith Management. Sources cautioned that investor participation and final terms could still change before the round closes.

DeepSeek, Liang, NetEase, JD.com, Monolith Management, and the China Integrated Circuit Industry Investment Fund did not immediately respond to requests for comment. Tencent and CATL declined to comment.

The list of potential investors highlights China’s push to strengthen domestic AI capabilities amid growing technological competition with the United States.

CATL’s interest is particularly significant. Known as the world’s largest electric vehicle battery maker, the company has been increasing its focus on AI infrastructure opportunities, including energy storage systems and data center power solutions. As AI workloads consume more electricity, energy availability has become a strategic factor in determining which companies can scale the fastest.

Tencent’s involvement carries its own implications. The company has invested heavily in its Hunyuan AI model but continues to face intense competition from rivals such as ByteDance’s Doubao and DeepSeek. A closer relationship with DeepSeek could help Tencent strengthen its position in China’s increasingly crowded AI market.

DeepSeek became China’s AI breakout star

DeepSeek emerged as China’s AI champion early last year after the release of its V3 and R1 models attracted widespread attention from researchers, developers, and investors. The models challenged assumptions that leading AI systems could only be built with massive budgets and unrestricted access to advanced American hardware.

The company has continued to push forward. In April, DeepSeek introduced its next-generation V4 model, describing it as a major step forward for open-source AI. Independent evaluations suggest the model still trails several leading systems from both China and the United States, though it remains among the strongest open-source AI models available today.

DeepSeek faces a different path than OpenAI and Anthropic

The proposed fundraising would rank among China’s largest private technology financings, yet it remains far smaller than the capital raises secured by leading U.S. AI companies.

OpenAI reportedly raised $122 billion earlier this year, and Anthropic secured $65 billion last month. Those companies operate in markets with deeper pools of private capital and broader access to advanced computing infrastructure.

DeepSeek faces a different reality.

“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,” said Alfredo Montufar-Helu, managing director at Ankura China Advisors in Beijing.

Those restrictions have pushed Chinese AI companies to build around domestic supply chains, local investors, and homegrown infrastructure.

People familiar with the matter said DeepSeek expects to complete the funding round within the next several weeks.

The company has not publicly discussed plans for an initial public offering. OpenAI and Anthropic are widely expected to pursue public market debuts in the future.

For now, DeepSeek is focused on a more immediate challenge: securing enough capital to compete in the next chapter of the global AI race.

DeepSeek Founder (Image credit: South China Morning Post)