DeepSeek raises $7.4 billion and becomes China's most valuable startup

Chinese AI company DeepSeek has closed its first-ever funding round, raising more than 50 billion yuan, or roughly $7.4 billion.

According to The Information, investors valued the company at more than $50 billion, making DeepSeek the most valuable startup in China.

The structure of the deal is unusual. Out of the total raised, $3 billion came directly from Liang Wenfeng, DeepSeek's founder, who already owns 90% of the company. Most of the remaining investors did not put money in directly, instead routing their capital through a fund Liang set up specifically for this purpose. According to sources, the arrangement is designed to let the founder hold on to full control of the company even after taking in this much external capital. Among the direct investors was China's National AI Industry Investment Fund, though its contribution was relatively modest, at $150 million.

DeepSeek plans to use the new funding to scale up its research and development efforts and to expand its computing infrastructure, meaning the purchase and maintenance of the servers and accelerators needed to train new models. The round is a notable signal for the broader industry. DeepSeek has built a reputation for developing competitive AI models at a fraction of the cost incurred by Western leaders, and it now has the resources to scale that approach significantly.