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According to a Reuters story, Chinese AI startup DeepSeek is looking to raise $7 billion in its first funding round.

According to individuals familiar with the matter, the Chinese AI player is gathering funds from Tencent and battery giant CATL and is probably worth between $52 billion and $59 billion.

DeepSeek’s AI heft was recognised by Silicon Valley when, early last year, its V3 and R1 models drove the realisation that AI models didn’t need big-bang budgets.

The AI firm is likely to raise around $1.48 billion from Tencent Holdings, around $740 billion from CATL and its founder, Liang Wenfeng, committing $2.96 billion of his own money, according to the report.

The slate of investors emphasises the extent to which China is building a self-sufficient AI ecosystem, especially in light of a semiconductor ban imposed by the US that starves the country of the very core of the AI buildout.

However, the scale of the fundraise pales in comparison to what some of the bigger rivals like Anthropic and OpenAI have done recently.

Anthropic finished a recent funding round raising $65 billion and valuing the company at $965 billionwhile OpenAI’s valuation touched $852 billion after it closed a funding round in March, raising around $122 billion.

What made everyone sit up and take notice of DeepSeek is the shoestring budget on which it developed its AI models, directly putting a challenge to American rivals who are investing billions of dollars in building compute capacity.

China’s AI semiconductor regime continues to remain largely indigenously driven, with the electronics behemoth Huawei driving big changes. It recently came up with a breakthrough chip design framework called Tau Scaling that focuses on time scaling rather than the conventional geometric scaling.

The company thanked the US for imposing the curbs that blocked access to ASML’s state-of-the-art lithography technology, allowing Huawei to make advancements in chip design without relying on external players.

(YEAR)

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