DeepSeek Halts $1.4 Billion Funding Round
DeepSeek has informed some potential investors of a temporary pause in its second funding round, following widespread online controversy sparked by comments attributed to its founder, Liang Wenfeng, regarding the competition between China and the United States in the field of artificial intelligence, according to Bloomberg.
Sources said the company verbally informed several investors that they would not sign investment agreements in the coming days as previously expected, noting that DeepSeek may resume the fundraising process at a later date.
Insiders attributed the decision to pause, in part, to Liang’s displeasure over reports and online posts that circulated excerpts from his conversations with investors during the first funding round, which closed last June and raised approximately $7 billion for the AI lab.
The posts, which Bloomberg has not independently verified, included remarks attributed to Liang about the Chinese AI sector’s reliance on Nvidia chips, as well as the continued technological gap between China and the United States in certain aspects of AI development.
Insiders confirmed that negotiations are still ongoing and that the company may proceed with the deal later, though it remains unclear whether it has informed all potential investors of its new stance.
These developments come just weeks after DeepSeek closed the largest initial funding round for a Chinese tech startup, attracting prominent names such as Tencent, CATL, and the National AI Industry Investment Fund of China.
The company was targeting a raise of at least 10 billion yuan in the new round, with the final valuation potentially rising depending on investor demand. It also sought a pre-money valuation of no less than 480 billion yuan, compared to a valuation nearing $50 billion in the previous round.
Meanwhile, the company has begun preparations for an initial public offering (IPO) that could be filed later this year, a move that could represent one of the most anticipated tech IPOs in China.
DeepSeek has attracted widespread investor interest as a key player in China’s efforts to compete with the United States in AI. The company gained global prominence last year after developing an advanced AI model that demonstrated strong performance using relatively fewer computing resources, seen as evidence that Chinese firms can rival Silicon Valley despite US restrictions on the export of advanced chips.
Management indicated to potential investors that priority will remain on advanced research and scientific breakthroughs rather than rapid revenue generation, with continued development of open-source AI models and the pursuit of artificial general intelligence (AGI).
The latest funding round led to a significant jump in Liang Wenfeng’s wealth, which rose to approximately $36 billion from $16.7 billion previously, according to Bloomberg’s Billionaires Index, making him the wealthiest AI model company founder globally, surpassing prominent figures at Anthropic and OpenAI.
