DeepSeek Set to Raise $7.4bn in First-Ever Funding Round, Backed by Tencent and CATL

A Startup That Once Said No to Money

For most of its short life, DeepSeek didn't want outside cash. The Hangzhou-based artificial intelligence lab repeatedly turned away offers from China's biggest venture capital firms and tech giants, content to operate under the wing of its parent, the quantitative hedge fund High-Flyer Capital Management. That stance is now changing dramatically. DeepSeek is set to raise approximately 50 billion yuan, or about $7.4 billion, in its first-ever external funding round, according to Reuters.

The Numbers Behind the Deal

The round would value DeepSeek at somewhere between 350 billion and 400 billion yuan, or roughly $52 billion to $59 billion. That figure is striking when you consider that as recently as April, the company was reportedly in early talks to raise at least $300 million at a valuation of around $10 billion. In a matter of weeks, the terms have ballooned roughly six-fold, a sign of just how intense investor appetite for Chinese AI has become.

Who's Writing the Cheques

The single largest contributor is founder Liang Wenfeng, who is committing 20 billion yuan of his own personal fortune. Among external backers, Tencent is considering 10 billion yuan, while battery manufacturer CATL is weighing 5 billion yuan, positioning the two as the biggest outside investors. DeepSeek is also in advanced discussions with China's national AI fund, gaming company NetEase, and e-commerce firm JD.com. Hong Kong-based IDG Capital and Monolith Capital are reportedly in the mix as well. In total, the number of investors is expected to stay below ten, keeping the cap table tight.

Why These Backers Matter

Each investor brings a strategic angle. CATL, the world's largest battery maker, is pushing to sell power equipment to energy-hungry AI data centres, so a stake in a leading model-maker fits neatly with its ambitions. Tencent's participation deepens its own AI strategy at a moment when it is testing an AI agent inside WeChat. The proceeds are expected to fund expanded computing infrastructure and improved employee compensation, two of the most pressing needs for any frontier AI lab.

A Global Ripple Effect

DeepSeek shot to global fame earlier this year when its low-cost V3 and R1 models rattled markets and challenged Western assumptions about how much money it takes to build competitive AI. This funding round, expected to close within the next couple of weeks, cements its status as China's national AI champion, even as financial specifics may still shift before signing.