Inside DeepSeek's Record-Breaking Funding Round

The round marks a dramatic shift for the Hangzhou-based AI lab, which had previously turned down multiple funding offers from China's top venture capital firms and tech giants. As recently as April, the company was in early talks to raise at least $300 million at a valuation of around $10 billion — making the current terms a roughly six-fold increase in just weeks.

Founder Liang Wenfeng is committing 20 billion yuan of his personal funds, making him the single largest contributor to the round. Tencent is considering an investment of 10 billion yuan, while battery manufacturer CATL is looking at 5 billion yuan, positioning both as the largest external backers.

DeepSeek is also in advanced discussions with China's national AI fund, gaming company NetEase, and e-commerce firm JD.com, according to the sources. Hong Kong-based IDG Capital and Monolith Capital are also among prospective investors. The total number of backers is expected to be fewer than ten.

The funding round's trajectory has shifted rapidly. In late April, Reuters reported DeepSeek was initially targeting $3 billion to $4 billion at a valuation of up to $50 billion, with China's state-backed national AI fund in talks to lead. By late May, The Information reported that CATL had entered negotiations as part of the round's expansion. The deal is now expected to close within the next few weeks, though financial specifics may still change.

The investment reflects the growing strategic importance of DeepSeek, whose low-cost AI models rattled global markets earlier this year. CATL's involvement aligns with its push to sell power equipment to AI data centers, while Tencent's participation deepens its AI ambitions. The proceeds are expected to fund expanded computing infrastructure and improved employee compensation. DeepSeek remains under the ownership umbrella of Chinese hedge fund High-Flyer Capital Management.