China’s DeepSeek to raise fresh capital at US$74 billion valuation ahead of onshore IPO

[HONG KONG/BEIJING] Chinese artificial intelligence startup DeepSeek is planning to launch a fresh fundraising round at a valuation of about 500 billion yuan (US$74 billion) ahead of a potential mainland initial public offering, two people with knowledge of the matter said.

The plan comes just weeks after the Hangzhou-based company, which drew global attention with its low-cost AI models in 2025, raised about US$7.4 billion in June, with a post-money valuation of about 450 billion yuan, the people said.

The back-to-back fundraising plans underscore strong investor appetite for one of China’s most closely watched AI companies, but also point to the rising costs of competing in AI, which requires large amounts of computing power, data-centre capacity and engineering talent.

DeepSeek is looking to raise as much as 50 billion yuan in the new funding round, said a third person briefed on the matter.

It has also started early deliberations for a potential IPO on Shanghai’s Nasdaq-style Star Market, the three sources and two other people with knowledge of the plan said. The company has set an internal target to complete an IPO filing this year, one of them added.

All the people declined to be identified because the information is not public.

The fundraising and IPO plans are at early stages and terms and timetable may change, they said.

DeepSeek did not immediately respond to a request for comment.

Bloomberg News first reported on Tuesday that DeepSeek was preparing for a possible IPO filing, while the Financial Times reported that the company was weighing a fresh fundraising round at a valuation of at least 480 billion yuan.

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DeepSeek shook global technology markets last year after releasing models that appeared to rival leading US systems at lower training and operating costs.

Soon after its maiden fundraising round in June, DeepSeek said it planned to double staff across departments, including in areas such as data centres and AI agents, systems capable of performing tasks with limited prompting.

Some of those initiatives will require significant capital expenditure. Reuters reported earlier this month that DeepSeek was looking to develop its own AI inference chip and had discreetly increased hiring of chip-design engineers for the project.

DeepSeek had long stood out in China’s AI sector for rejecting outside funding. Founder Liang Wenfeng had largely bankrolled the company using his quantitative hedge fund High-Flyer before its recent external financing, sources previously told Reuters.

But the cost of staying at the frontier of AI has risen sharply, forcing a change in strategy.

DeepSeek has in the past year faced stiff competition at home from tech giants including ByteDance and Alibaba, as well as well-funded AI startups such as Z.ai, Moonshot, and MiniMax.

In the June funding round, DeepSeek founder Liang personally committed 20 billion yuan, while Tencent and battery giant CATL chipped in 10 billion yuan and five billion yuan, respectively, to become the largest external shareholders, Reuters reported at the time.

Other investors include China’s national AI fund, gaming developer NetEase and e-commerce giant JD.com, as well as investment firms IDG Capital, Loyal Valley Capital, Monolith Management and Shixiang Capital, according to sources and media reports.

The participation of the state-backed AI fund highlighted DeepSeek’s strategic importance to Beijing’s efforts to build domestic AI champions and reduce reliance on foreign technology. REUTERS