China’s DeepSeek to raise $12 billion in Tencent-backed funding – CNBC TV18
DeepSeek is nearing a landmark fundraising milestone, closing in on at least 80 billion yuan (about $12 billion) in a new round that exceeds its original target and positions the company for an initial public offering in early 2027. Backed by heavyweight investors including Tencent and battery giant CATL, the AI startup is accelerating plans to expand its computing infrastructure and model development.
Oversubscribed round could near 100 billion yuan
The company initially sought around 50 billion yuan, but strong demand—spurred by the successful debut of its latest model, V4 Flash—has significantly lifted the total. Based on signed term sheets, the final amount could approach 100 billion yuan, according to people familiar with the matter. The momentum underscores investor confidence in DeepSeek’s ability to deliver competitive performance at lower costs versus leading global players.
Breakthroughs and cost-performance edge
V4 Flash has reset expectations for price-to-performance in frontier AI models, building on a track record that began with a 2025 release which matched Silicon Valley capabilities at a fraction of the expense. Under founder Liang Wenfeng, DeepSeek has developed a reputation for rapid iteration and technical innovation, helping it emerge as a central player in China’s broader AI ambitions.
Massive infrastructure build with Huawei accelerators
Like its peers, DeepSeek is amassing substantial capital to scale compute. The company plans to deploy at least 160,000 of Huawei’s top-tier AI accelerators at a large data center under construction in Inner Mongolia—one of the biggest known clusters of Huawei chips in development. DeepSeek has also released software, created with Huawei, to program these AI accelerators, tightening the integration between its models and underlying hardware.
Positioning for a high-profile 2027 IPO
With the new funding nearing completion, DeepSeek is expected to begin restructuring in preparation for an IPO targeted for early 2027. While final terms may still evolve, the company had originally aimed for a financing valuation of about 500 billion yuan. The scale of investor interest suggests one of the most closely watched Chinese market debuts in years.
Strategic investors and ecosystem bets
Tencent, which previously invested 10 billion yuan, is deepening its involvement as it integrates AI across its platforms and services. CATL’s participation aligns with its move into supplying components and solutions to AI-driven infrastructure, including data center ecosystems. Together, these backers bring capital, scale, and industrial reach that could help DeepSeek accelerate deployment and commercialization.
Open models and AGI ambitions
Founder Liang has told investors he intends to continue advancing open AI models while pursuing the longer-term goal of artificial general intelligence. He has emphasized that pushing the boundaries of the technology remains the company’s primary focus, even as it explores monetization opportunities that align with its research agenda.
Competitive landscape and parallel IPO plans
DeepSeek’s rapid progress comes as other Chinese AI firms move to bolster their own war chests. Rival Moonshot is also targeting an early 2027 listing, following funding that valued it at about $50 billion. The parallel timelines highlight intensifying competition among domestic AI developers to scale compute, talent, and product pipelines ahead of public market debuts.
Controversy and momentum
DeepSeek’s capital raise has not been without turbulence. The company briefly paused the process after widely shared comments, attributed to Liang, about U.S.–China AI competition drew public scrutiny, including remarks on reliance on certain foreign chips and China’s lag in some areas of sophistication. The episode did little to dent investor interest, with the round ultimately expanding well beyond initial expectations.
Founder background and earlier valuation markers
DeepSeek originated as an offshoot of Liang’s hedge fund, High-Flyer, which provided key early support. Liang participated again in a previous 50-billion-yuan round that valued the company at roughly 350 billion yuan, and his personal net worth has risen sharply alongside DeepSeek’s ascent. The latest fundraising, if finalized near the upper end of expectations, would further cement the company’s status as a flagship of China’s AI ecosystem.
Outlook
With substantial new capital poised to arrive, DeepSeek is moving to expand its compute footprint, accelerate model development, and prepare for a potential blockbuster IPO. The combination of strategic backing, ambitious infrastructure plans, and a focus on open, high-performance models positions the company to play a central role in the next phase of AI competition.
