Chinese startup DeepSeek, which has stirred significant waves in the AI industry, is seeking funding from external investors for the first time. According to a report by U.S.-based tech news outlet The Information, the company plans to raise at least $300 million at a valuation of $10 billion.
Shift from ‘No-Touch’ Policy
This marks a major policy shift for DeepSeek, which had previously avoided external funding. Founded in 2023 with support from Chinese quantitative hedge fund Huafang Quantitative, the company had consistently rejected outside investment. Co-founder Liang Wenfeng had repeatedly turned down such offers, aiming to keep DeepSeek independent and free from commercial pressures.
However, circumstances have recently changed. Analysts believe three key factors have pushed DeepSeek toward seeking funding: delays in launching its new V4 model following the success of its earlier R1 model, the departure of top researchers to rival companies, and the rapidly rising costs of developing AI models.
Valuation and Investor Sentiment
A $10 billion valuation would place DeepSeek among the top-tier AI startups. For comparison, OpenAI recently completed a funding round at a valuation of $300 billion.
However, as a Chinese company, DeepSeek faces hesitation from U.S. venture capital firms. Despite interest, many investors remain cautious due to geopolitical tensions and the risk of potential U.S. sanctions. It is widely expected that the majority of investment will come from Chinese firms.
Challenges Surrounding the V4 Model
DeepSeek made a global impact in early 2025 with its R1 model. Since then, however, the company has not introduced any major new developments. The release of its next model, V4, has been delayed multiple times. Experts attribute the delay to the need to ensure compatibility with Huawei chips.
Due to U.S. sanctions imposed last year, DeepSeek has been forced to rely on Huawei chips, whereas it previously used Nvidia chips.
Loss of Key Researchers
In addition to delays in V4, DeepSeek has lost two of its key researchers. Luo Fuli, one of the principal architects of the R1 model, recently joined Xiaomi, while another researcher, Guo Daiya, moved to ByteDance. These researchers were central to the company’s innovation engine.
Replacing them and retaining top talent will require significant financial resources.
If the funding effort succeeds, DeepSeek will be able to focus on developing more advanced AI models and retaining its research talent. However, it remains to be seen whether this move will alter the company’s earlier identity of being “independent and free from commercial pressure.”
DBTech/BMT/OR
