TL;DR
DeepSeek has pulled out of its second fundraising round after founder Liang Wenfeng’s leaked comments about his reliance on Nvidia.
DeepSeek has suspended its second fundraising round after comments made by founder Liang Wenfeng during private investor meetings were leaked and went viral on Chinese social media. Bloomberg reported on this on friday. Liang verbally informed potential backers to hold off on the round, which is targeting a pre-money valuation of about 480 billion yuan, equivalent to about $71 billion. The hiatus came after Liang expressed frustration that candid remarks about China’s dependence on Nvidia chips and the country’s artificial intelligence gap with the United States were made public without his permission.
The company closed its first funding round in June, raising nearly $7 billion from investors including Tencent, battery giant CATL and China’s National Artificial Intelligence Industry Investment Fund. That round valued the Hangzhou-based startup at between $50 billion and $52 billion, making it one of the world’s most valuable AI companies. DeepSeek is also designing its own AI chip To reduce China’s dependence on Nvidia hardware, which is subject to US export restrictions that limit access to cutting-edge processors.
The leaked comments hit a sensitive spot for a Chinese AI company. Liang told investors that China lags behind the United States in its AI capabilities and that DeepSeek is still heavily dependent on Nvidia chips despite export controls. The revelations, once made public, drew widespread attention on Weibo and other platforms, putting the company in an unsettling spotlight as Beijing promotes a narrative that Chinese AI companies are rapidly closing the gap on their American rivals.
Despite the funding freeze, DeepSeek is preparing for a public listing and could file for an initial public offering as soon as this year, according to people familiar with the matter. With a fortune estimated by Bloomberg at $36 billion, Liang is the world’s richest artificial intelligence model creator, ahead of Anthropic co-founder Dario Amodei and former OpenAI president Greg Brockman. DeepSeek is owned by Zhejiang High-Flyer Asset Management, the hedge fund Liang founded before moving into artificial intelligence research.
The company has given a signal about it prioritizes aggressive pricing and open source development about short-term revenue, a strategy that won him a large developer following, but also raised questions about how he plans to sustain himself financially. Liang has vowed to continue developing open-source AI models that set DeepSeek apart from most Western rivals but complicate the economics of a $71 billion capital raise. Whether the funding hiatus is a brief hiatus or a sign of deeper tensions between DeepSeek’s research ambitions and investor expectations will depend on how quickly the dispute is resolved.
