DeepSeek Finally Opens Its Doors to Outside Investors After Turning Everyone Down

TLDR

• DeepSeek is raising at least $300 million in its first-ever outside funding round
• The Chinese AI startup is targeting a valuation of at least $10 billion
• DeepSeek is owned by Chinese hedge fund High-Flyer Capital Management, which has funded it until now
• The company previously turned down multiple funding offers from top Chinese VC firms and tech giants
• Some US venture capitalists may hesitate to invest due to DeepSeek’s Chinese origins

DeepSeek, the Chinese AI startup behind the low-cost R1 model that shook Silicon Valley last year, is now seeking outside funding for the first time.

The company is in talks to raise at least $300 million at a valuation of at least $10 billion, according to a report from The Information, citing four people familiar with the matter.

Until now, DeepSeek has been entirely funded by its parent company, High-Flyer Capital Management, a Chinese hedge fund.

The startup had previously turned down multiple funding offers from China’s leading venture capital firms and major tech companies. This round marks a clear shift in that approach.

DeepSeek’s R1 model drew widespread attention from Wall Street and Silicon Valley when it launched last year. The model was seen as competitive with top Western AI systems but at a much lower cost to build.

That release rattled stock markets and raised questions about the massive spending plans of US AI companies.

Why DeepSeek Needs Outside Capital

Building and running advanced AI models requires growing amounts of money. The rise of reasoning models and agentic AI tools has pushed capital requirements higher across the industry.

DeepSeek is now looking to raise funds to stay competitive in that environment.

The company did not respond to a Reuters request for comment, and Reuters said it could not immediately verify the details of the report.

US Investors May Stay on the Sidelines

Because DeepSeek is a Chinese company, some US venture capitalists are expected to be cautious about participating in the round, according to The Information.

This reflects broader tensions around US-China technology competition.

Reuters reported earlier this year that DeepSeek trained one of its newest models on Nvidia’s most advanced chip, despite that chip being subject to US export restrictions on sales to China.

DeepSeek also did not share its flagship model with US chipmakers for performance optimization, Reuters reported.

China has been pushing domestic firms to use local processors and reduce dependence on foreign technology, adding another layer of complexity to DeepSeek’s position.

The $10 billion valuation target would make DeepSeek one of the more highly valued AI startups globally, despite its relatively lean operational history compared to US peers.

DeepSeek has not confirmed the fundraising talks publicly. The Information’s report is based on people familiar with the matter, and no deal has been announced.

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