DeepSeek pauses fundraising after comments go viral

Chinese artificial intelligence company DeepSeek has suspended its second major fundraising round after private comments from its founder about China's reliance on U.S. technology and its AI gap with the United States were leaked and spread widely online. The company verbally informed prospective investors that planned investment agreements would not be signed in the coming days, according to people familiar with the matter.

The pause stems from founder Liang Wenfeng's frustration that his candid remarks from a recent investor meeting were shared publicly without his permission. Chinese media reported that Liang discussed China's dependence on Nvidia chips for AI development and the country's persistent lag in AI sophistication relative to the U.S. These comments touched on sensitive ground at a time when Chinese officials have promoted a narrative of rapidly closing the technological gap with American rivals.

The halted round had been targeting at least 10 billion yuan, approximately $1.5 billion, at a pre-money valuation of roughly 480 billion yuan, or about $71 billion. This represents a significant increase from the company's first funding round, which closed in June and...