DeepSeek in Talks for $300M Funding at Over $20B Valuation

Chinese AI startup DeepSeek is in advanced discussions with tech giants Tencent and Alibaba for its first outside funding round, seeking at least $300 million at a valuation exceeding $20 billion, according to reports from individuals familiar with the matter. The Shanghai-based company, previously funded solely by its parent hedge fund HighFlyer Capital Management, marks a significant shift as it aims to bolster its position in the intensifying global race for advanced artificial intelligence models.

DeepSeek's move comes amid surging demand for its open-source AI systems, which have strained its infrastructure and driven up operational costs. The startup, founded by Liang Wenfeng, has long prioritized research over rapid commercialization, rejecting prior investment offers from major Chinese venture firms and technology companies. HighFlyer's strong financial performance, including reported returns of about 56.6 percent in 2025, had allowed DeepSeek to operate independently. However, recent usage spikes have led to service outages, highlighting the need for expanded computing resources to train and deploy increasingly complex models.

The company's breakthrough arrived with the...