DeepSeek is about to become one of the most heavily funded AI startups in history. The Chinese AI lab is closing in on at least 80 billion yuan — the headline DeepSeek funding $12 billion figure — in a new round backed by Tencent and battery giant CATL, blowing past its original 50-billion-yuan target ahead of a landmark domestic IPO expected in early 2027, Bloomberg reported via CNBC TV18. Signed term sheets suggest the final tally could approach 100 billion yuan, or about $15 billion, with the round expected to close in October.
The scale of the DeepSeek funding round puts the startup in rare territory for a private AI company anywhere in the world. It also signals how aggressively Chinese investors are backing domestic model developers as the AI race with US labs intensifies — a race DeepSeek has been winning on cost efficiency for more than a year.
Who Is Backing the DeepSeek $12 Billion Round
Battery pioneer Contemporary Amperex Technology Co. (CATL) and WeChat operator Tencent Holdings have committed among the largest amounts in the financing, according to people familiar with the matter who asked not to be named because the details are not public. Tencent is doubling down: it also landed the biggest investment in DeepSeek’s previous round, putting in 10 billion yuan, Bloomberg reported via The Straits Times.
DeepSeek initially sought about 50 billion yuan, but investor interest far outstripped expectations after the successful release of its latest model, DeepSeek-V4.1-Flash, in September. The round has drawn massive interest from both existing and new investors, and Reuters reported that the capital committed already exceeds the original target, with fundraising expected to wrap up in October, Reuters reported.
The fundraising kicked off in July at a targeted valuation of 500 billion yuan (about $74 billion) — just a month after DeepSeek raised roughly $7.4 billion in its first external funding round. The new money arrives less than two weeks after the company hit a $1 billion annualized revenue run rate, more than double its pace from just a few months earlier, as rising demand for its models and higher prices turn last year’s breakout into a sizable business.
What the Money Buys: 160,000 Huawei Chips and a 2027 IPO
Like every frontier AI lab, DeepSeek needs enormous capital to bankroll its compute ambitions. The company plans to deploy at least 160,000 of Huawei Technologies’ top AI accelerators at a massive data center it is building in Inner Mongolia — potentially one of the largest known clusters of Huawei chips anywhere, highlighting China’s push to reduce reliance on Nvidia’s AI ecosystem.
DeepSeek recently partnered with Huawei to develop programming tools optimized for the Ascend AI chips and has publicly released the software, underscoring a deepening hardware alliance. The funding round sets the stage for one of the most hotly anticipated Chinese market debuts in years: DeepSeek hired CITIC Securities to prepare for a potential STAR Market IPO, and once this round closes, the next step is expected to be a company restructuring to get the business IPO-ready, though timing, valuation and fundraising size remain undecided.
The round also drew its share of drama. DeepSeek briefly suspended the deal after comments widely attributed to founder Liang Wenfeng about US-Chinese AI competition went viral on social media; Chinese outlet Yicai reported in July that Liang had talked about a reliance on Nvidia chips and China’s persistent lag in AI sophistication relative to the US. The deal recovered quickly.
Liang Wenfeng’s Bet: Open Models, AGI, and a $36 Billion Fortune
Founder Liang Wenfeng — a hedge fund manager whose startup grew as an offshoot of his quant fund High-Flyer — has told investors he will keep developing open AI models while pursuing the broader goal of artificial general intelligence, making clear his main goal is pushing the boundaries of technology rather than monetization. His net worth has more than doubled to around $36 billion since DeepSeek closed its first external round this summer.
DeepSeek’s reputation rests on technical efficiency. The startup reset cost-versus-performance expectations against leaders Anthropic and OpenAI with its V4 Flash release, capping a run that began when a 2025 model matched Silicon Valley capabilities at a fraction of the cost. That efficiency story is exactly what has Chinese institutional investors rushing in — and it is also why US labs keep watching. The open-weights race, in which Western startups like Reflection AI are now positioning themselves, was effectively kicked off by DeepSeek’s breakthroughs.
Rival Moonshot AI is on a parallel track: it is targeting an early 2027 IPO after closing a funding round that valued it at $50 billion, per Bloomberg. China’s AI IPO pipeline is becoming a contest of its own — one where the winners will be decided by compute scale, model quality, and now, balance sheets.
Why This DeepSeek Funding Round Matters Globally
A $12-to-$15 billion raise would be enormous by any standard; for context, it exceeds the GDP of several small countries and dwarfs the funding rounds of nearly every Western AI startup outside the very largest. It is a statement that China’s capital markets intend to fund a domestic AI champion through the full training-compute buildout, rather than watching the frontier consolidate in the US.
The unconfirmed pieces matter too. Bloomberg’s and Reuters’ reporting rests on unnamed people familiar with the matter; DeepSeek did not respond to requests for comment, and both CATL and Tencent declined or had no immediate comment. Details may still shift in final talks. But the direction is unmistakable: after a year of efficiency-led disruption, DeepSeek is converting technical credibility into capital at a historic scale — and the US-China AI competition just got a lot more expensive.
FAQ
How much is DeepSeek raising?
DeepSeek is close to securing at least 80 billion yuan (about $12 billion) in its latest funding round, according to Bloomberg and Reuters, with signed term sheets suggesting the final tally could approach 100 billion yuan (about $15 billion). The round is expected to close in October 2026.
Who are the biggest investors in the DeepSeek funding round?
Tencent Holdings and battery giant CATL (Contemporary Amperex Technology Co.) have committed among the largest amounts. Tencent also invested 10 billion yuan in DeepSeek’s previous round.
When is DeepSeek’s IPO?
A landmark domestic IPO is expected in early 2027. DeepSeek hired CITIC Securities to prepare for a potential STAR Market listing, and the company is expected to restructure after the funding round closes. Timing, valuation and fundraising size are not finalized.
What will DeepSeek spend the $12 billion on?
Primarily compute. DeepSeek plans at least 160,000 Huawei Ascend accelerators at a new Inner Mongolia data center, plus continued development of open AI models — founder Liang Wenfeng says his goal is pushing toward artificial general intelligence rather than monetization.
Sources: Bloomberg via CNBC TV18, Reuters, The Straits Times (Bloomberg), Tech Startups
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