Chinese AI startup DeepSeek is preparing to raise about $7.4 billion (around 50 billion yuan) in its first-ever external funding round, a deal that could value the company at $52-59 billion (350-400 billion yuan) after the investment, reports Reuters. If completed, the transaction would rank among the largest private fundraising rounds in China’s technology sector. Notably, the company – which became globally known after the success of its V3 and R1 models – has until now largely avoided outside capital and relied on support from founder Liang Wenfeng and his quantitative hedge fund High-Flyer.
According to the report, fewer than ten investors are expected to participate, with some of China’s most powerful corporations and institutions involved in the round. Liang Wenfeng himself is reportedly committing $2.8 billion (about 20 billion yuan) of personal capital, while Tencent is considering an investment of $1.4 billion (10 billion yuan) and battery giant CATL around $700 million (5 billion yuan). Other participants are said to include China’s national AI investment fund, NetEase and JD.com. Much of the capital is expected to be directed toward building larger computing clusters, acquiring critical semiconductor resources, and improving employee compensation as competition for AI talent intensifies.
It is important to note that a key reason behind DeepSeek’s rapid rise has been its focus on developing advanced AI models with far fewer resources than many of its competitors. The company gained global attention after claiming that one of its flagship models was trained for about $6 million, a small fraction of the cost typically associated with leading AI systems. Its V3 and R1 models later impressed researchers and experts by delivering strong reasoning capabilities while using significantly less computing power than many expected. Therefore, DeepSeek quickly emerged as China’s best-known AI startup and became a symbol of the country’s growing ability to develop globally competitive AI technology despite hardware restrictions imposed by the US. Even DeepSeek’s V4 series became the company’s first major AI family optimized to run on Huawei’s Ascend AI accelerators instead of relying primarily on Nvidia hardware.
Recently, the company further intensified competition in the AI market by making a 75% price cut for its flagship V4-Pro model permanent. As a result, uncached input token pricing was reduced from about $1.74 to $0.435 per million tokens, while output token costs fell from $3.48 to $0.87, lowering costs to just a quarter of their original levels. Estimates suggest the model is now 20 to 35 times cheaper than some premium AI offerings from OpenAI, Anthropic and Google, whose frontier models can cost $8-15 per million input tokens and $30-50 per million output tokens.
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Ashutosh is a Senior Writer at The Tech Portal, largely reporting on new tech, and intersection of technology and business. Ashutosh’s career spans across nearly a decade of technology writing across multiple platforms and languages.
