DeepSeek in Talks to Raise at $20B — Alibaba and Tencent Both Want In
The Chinese AI lab that refused all outside money for years is now negotiating its first external funding round at more than double the valuation reported just days ago. Both Alibaba and Tencent are in discussions to participate.
DeepSeek is in talks to raise its first-ever external funding round at a valuation exceeding $20 billion, according to Bloomberg and The Information. Both Alibaba and Tencent are reportedly in discussions to participate. The target raise is approximately $300 million.
That $20 billion figure represents a sharp revision from the $10 billion valuation being floated earlier this month. In less than a week, DeepSeek’s paper worth doubled — a sign of how aggressively China’s largest tech platforms want a piece of the country’s most talked-about AI lab.
Why this matters
DeepSeek’s entire brand has been built on a studied refusal of outside capital. The Hangzhou-based lab, backed exclusively by the hedge fund High-Flyer, spent years proving that frontier AI research doesn’t require Silicon Valley-scale fundraising. Its open-weight R1 model shook global markets in January 2025 precisely because it benchmarked against GPT-4 class models at a fraction of the rumored training cost.
Taking money from Alibaba and Tencent would change that calculus. Both companies run hyperscale cloud platforms — Alibaba Cloud and Tencent Cloud — with obvious commercial interest in distributing DeepSeek’s models to enterprise customers. Any investment from either would likely come with distribution agreements attached.
The context
The timing isn’t random. U.S. export controls on advanced chips have tightened repeatedly since late 2023, and DeepSeek has become one of the most prominent symbols of Chinese AI self-sufficiency. Its models run efficiently on hardware that doesn’t require NVIDIA’s H100 or H200. That has made it both a geopolitical asset and a commercial product that Beijing’s tech giants want to own a slice of.
High-Flyer, DeepSeek’s parent, has reportedly been under pressure from investors to demonstrate some liquidity pathway. A funding round — even a small one by Silicon Valley standards — provides a market-legitimized valuation and creates optionality for future moves, whether that’s an eventual IPO or further strategic partnerships.
What the numbers say
At $20 billion, DeepSeek would trade at roughly 67 times the $300 million round size — a premium that reflects scarcity value more than current revenue. The lab does not publicly disclose revenue. Its API pricing is substantially below OpenAI’s, which suggests either significant losses or a business model that’s still being built.
Compare that to Anthropic’s last round at $61.5 billion, or OpenAI’s $340 billion valuation, and DeepSeek still looks cheap given the global reach of its models. Whether Alibaba and Tencent can agree on terms — and whether High-Flyer’s founder Liang Wenfeng is truly ready to take outside money — remains the open question.
The deal isn’t done. But the fact that talks are happening at all marks a meaningful shift for a lab that once made “no investors” part of its identity.