DeepSeek, a Chinese artificial intelligence company, is in talks to raise its first round of venture capital funding. In just a few weeks, its valuation has more than doubled from $20 billion to an estimated $45 billion. This rapid increase highlights the company’s growing prominence in the AI world, especially given its unique approach and strategic backing.

Rapid Growth and Strategic Backing

DeepSeek gained significant attention in early 2025 after launching a large language model that required much less compute power and cost far less than similar models from U.S. companies like OpenAI and Anthropic. Despite the lower resource needs, the model performs well in reasoning and coding tasks, placing it among the top AI models globally. The company also offers open versions on platforms like Hugging Face, making its technology accessible to a wide audience.

Founded by Chinese hedge fund billionaire Liang Wenfeng, who controls nearly 90% of the company, DeepSeek had previously operated without seeking outside investors. The decision to raise funds came as a response to competitors poaching talented researchers. Liang aims to offer shares to employees and attract top talent through this funding round. The move also aligns with China’s broader goal to develop indigenous AI technology.

Government Support and National AI Goals

The funding round is reportedly led by China Integrated Circuit Industry Investment Fund, a state-backed investment vehicle. This aligns with China’s strategy to develop homegrown AI and semiconductor technology, reducing reliance on U.S. tech. DeepSeek’s models are optimized to run on chips made by Huawei Technologies, a major Chinese hardware company.

This partnership is seen as a powerful move for China’s AI ambitions, allowing the country to compete with U.S. tech giants. Other major Chinese firms like Tencent and Alibaba are also in talks to participate in the funding, signaling strong government and industry support for DeepSeek’s growth. The company’s focus on open models and cost-efficient training positions it as a key player in China’s AI ecosystem.

As of now, DeepSeek has not responded to requests for comment. Its upcoming funding round could solidify its position as a leading AI player in China and beyond, with potential implications for global AI development and geopolitics.

Inspired by

• https://techcrunch.com/2026/05/06/deepseek-could-hit-45b-valuation-from-its-first-investment-round/

Sources

• ft.com
• bloomberg.com
• huggingface.co