Synopsis
Chinese tech giants Tencent and Alibaba are reportedly in talks to invest in AI startup DeepSeek. The company is aiming for a valuation exceeding twenty billion dollars. This potential funding highlights the significant capital needed for advanced AI development. Discussions are ongoing, and terms may change. DeepSeek's previous model release had a global impact.Listen to this article in summarized format
Owned by Chinese hedge fund High-Flyer Capital Management, DeepSeek is now aiming to raise funding at a valuation exceeding $20 billion, as its initial discussions with prospective investors sparked immense interest, the report said, citing one of the people.
Alibaba, Tencent and DeepSeek did not immediately respond to requests for comment. Reuters could not independently verify the report.
U.S.-listed shares of Alibaba rose 1.3% in premarket trading.
The Information reported on Friday that DeepSeek started discussions to raise outside capital for the first time, with a target to raise at least $300 million at a valuation of at least $10 billion.
This potential fundraise underscores the intense capital required to develop and operate cutting-edge AI models, especially with the growing complexity of advanced reasoning and autonomous agentic bots.
The talks are still underway and both the valuation and the amount of capital to be raised could still change, according to the report.
As it is a Chinese startup, some US venture capitalists might hesitate about investing in DeepSeek, the tech news website previously reported.
Reuters reported earlier this year that the company did not show US chipmakers its flagship model for performance optimization, and had trained one of its newest models on Nvidia's most advanced chip despite it being banned.
DeepSeek's initial release in January 2025 triggered a global tech selloff and spurred its Chinese rivals to release upgrades to their own models.
