Chinese tech giants Tencent Holdings and Alibaba Group are reportedly in talks to invest in DeepSeek, the AI firm that disrupted the global AI market in 2025 and rattled OpenAI with its low-cost, high-performance models.
DeepSeek, owned by Chinese hedge fund High-Flyer Capital Management, is now seeking to raise funding at a valuation of more than $20 billion, The Information reported.
Earlier this month, the publication, citing sources, reported that the AI company is set to raise 300 million at a valuation of at least $10 billion.
The prospect of an external fundraising round marks a notable shift for Liang Wenfeng, DeepSeek’s founder and chief executive, who is widely regarded within the industry as a technology idealist.
The Information says that the firm is determined to insulate the laboratory from the commercial imperatives that pervade the broader AI industry.
Yet the competitive landscape has changed dramatically since R1’s debut. Frontier AI models are advancing at an extraordinary pace, and technology giants from both the United States and China, armed with vastly deeper financial reserves, are bearing down on independent startups.
Industry observers suggest it is precisely this environment that has prompted DeepSeek to reconsider its funding philosophy.
The AI company is facing heightened competition following the loss of key researchers. Luo Fuli, a contributor to the V3 model, departed to head Xiaomi’s AI division. Meanwhile, Guo Daya, who was involved in earlier models, reportedly joined ByteDance at a higher salary.
Fresh capital would let DeepSeek invest more in infrastructure and pay competitive salaries to retain top engineers and scientists, a resource its rivals can easily outbid.
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