TL;DR
DeepSeek halted its second fundraising round after leaked comments from founder Liang Wenfeng about Nvidia reliance went viral
DeepSeek has suspended its second fundraising round after comments made by founder Liang Wenfeng during private investor meetings were leaked and went viral on Chinese social media, Bloomberg reported on Friday. Liang verbally informed prospective backers to hold off on the round, which had been targeting a pre-money valuation of roughly 480 billion yuan, equivalent to about $71 billion. The pause came after Liang expressed frustration that his candid remarks about China’s dependence on Nvidia chips and the country’s AI gap with the United States had been shared publicly without his permission.
The company closed its first funding round in June, raising roughly $7 billion from investors including Tencent, battery giant CATL, and China’s National AI Industry Investment Fund. That round valued the Hangzhou-based startup at between $50 billion and $52 billion, making it one of the most valuable AI companies in the world. DeepSeek has also been designing its own AI chip in an effort to reduce its reliance on Nvidia hardware, which is subject to US export restrictions that have limited Chinese access to the most advanced processors.
The leaked comments touched on sensitive ground for a Chinese AI company. Liang reportedly told investors that China remains behind the United States in AI capability and that DeepSeek still depends heavily on Nvidia’s chips despite the export controls. Those remarks, once made public, drew widespread attention on Weibo and other platforms, putting the company in an uncomfortable spotlight at a time when Beijing has been promoting the narrative that Chinese AI firms are rapidly closing the gap with their American rivals.
Despite the funding pause, DeepSeek appears to be preparing for a public listing and may file for an initial public offering as soon as this year, according to people familiar with the matter. Liang, whose net worth Bloomberg estimates at $36 billion, is the wealthiest AI model creator in the world, ranking above Anthropic co-founder Dario Amodei and former OpenAI president Greg Brockman. DeepSeek is owned by Zhejiang High-Flyer Asset Management, the hedge fund Liang founded before pivoting to artificial intelligence research.
The company has signalled that it prioritises aggressive pricing and open-source development over short-term revenue, a strategy that has won it a large developer following but also raised questions about how it plans to sustain itself financially. Liang has pledged to continue developing open-source AI models, a commitment that differentiates DeepSeek from most Western competitors but complicates the economics of raising capital at a $71 billion valuation. Whether the funding pause is a brief interruption or a sign of deeper tension between DeepSeek’s research ambitions and investor expectations will depend on how quickly the controversy fades.
