Chinese artificial intelligence startup DeepSeek is in talks for its first external fundraising round, with discussions potentially valuing the company at between $45 billion and $50 billion, according to people familiar with the matter.
The Hangzhou-based company could raise between $3 billion and $4 billion as it seeks to expand computing capabilities and improve employee benefits amid intensifying competition in China’s AI sector.
China’s state-backed China Integrated Circuit Industry Investment Fund, known as the “Big Fund,” is in discussions to lead the financing, while Tencent Holdings has also held talks about participating, the sources said.
DeepSeek, Tencent and the China Integrated Circuit Industry Investment Fund did not immediately comment.
The fundraising discussions mark a major shift for DeepSeek founder Liang Wenfeng, who has largely financed the company through his quantitative hedge fund High-Flyer and operated DeepSeek more like a research laboratory than a commercial venture.
People familiar with the talks said Liang is directly involved in negotiations and could also personally invest in the round.
DeepSeek’s valuation has reportedly climbed sharply in recent weeks, rising from around $20 billion earlier in the fundraising process.
The company gained global attention after releasing its open-source R1 model, which it said was developed using significantly less computing power than comparable systems from American rivals.
The latest V4 model, designed for more advanced AI agent tasks, was introduced last month, though outside evaluations suggested it remained behind leading Chinese and U.S. competitors.
The fundraising effort comes as competition intensifies across China’s AI industry, where rivals including ByteDance, Alibaba, MiniMax and Moonshot AI have secured significant financial backing.
Some competitors have also recruited DeepSeek researchers, including Luo Fuli, who joined Xiaomi to lead its MiMo AI model team.
The Big Fund’s potential involvement would further align DeepSeek with Beijing’s broader push for technological self-sufficiency amid tightening U.S. export restrictions on advanced semiconductors.
DeepSeek recently said its V4 model had been optimized to run on Huawei Ascend chips, part of China’s effort to build a domestic AI ecosystem less dependent on foreign technology.