AI: DeepSeek not faded out in China. RTZ #1062

A lot has happened in China this AI Tech Wave, since AI company DeepSeek seared into global attention early last year. Chinese AI companies private and public raced ahead to take a global lead in open source LLM AIs, wresting the crown away from Meta with Llama back then. Meta under founder/CEO Mark Zuckerberg of course choosing to go its own direction with mega AI Talent hires, and ramped up AI Data Center spend to over $135+ billion a year.

And Meta of course acquiring AI Agent company Manus of China for over $2 billion, with its founders now constrained by China to leave the country. More so to prevent other Chinese AI companies to have similar ideas via ‘Singapore Washing’.

And Chinese tech/AI companies to get very excited about the now US OpenClaw (now OpenAI acquihire) open source AI Agent mania, and develop its own innovations around that front. And China’s public companies like Alibaba now starting to swing the pendulum back towards it own closed AI models of late, to build their own AI applications atop.

Zhou Jingren, left, was brought in to lead AI model training by Alibaba chief executive Eddie Wu, right © FT montage/Getty Images

So a lot going on there in China on the AI Front. Which is not surprising. As Nvidia founder/CEO Jensen Huang constantly reminds, China is the second most important AI market in the world, with over half of the world’s AI Researchers.

So it’s no surprise that DeepSeek has new funding plans ahead of its next major AI releases.

The Information lays it out in “China’s DeepSeek is Raising Money for First Time, At $10 Billion-Plus Valuation”:

• “DeepSeek seeks $300M+ at $10B+ valuation in first outside funding round.”

• “Company needs capital to compete and address recent researcher departures.”

• “DeepSeek’s R1 model previously matched top U.S. AI models cheaply.”

“DeepSeek is in talks to raise outside capital for the first time, seeking to beef up its financial war chest so it can better compete in the costly battle to develop leading AI models, according to five people familiar with the matter.”

A quick reminder on DeepSeek’s unique founder history:

”DeepSeek is owned by Chinese hedge fund High-Flyer Capital Management, which has financed the startup so far. DeepSeek, whose AI model R1 took both Silicon Valley and Wall Street by storm last year, has previously turned down multiple funding offers from China’s top venture capital firms and tech giants.”

“But the startup has recently started talking to investors and is seeking to raise at least $300 million at a valuation of at least $10 billion, according to two of the people.”

And an AI founder Liang Wenfeng at DeepSeek, who marches to his own drum, even in China:

“If DeepSeek goes ahead with the fundraising, it would be a big shift for its founder and CEO, Liang Wenfeng, who is known in the industry as a technology idealist who wants to keep DeepSeek independent and free of commercial pressure.”

One that has seen some recent headwinds:

“DeepSeek has not released a new generation model since the breakout success of R1 in early 2025, and the startup has lost some star researchers recently. Luo Fuli, a key contributor to DeepSeek’s V3 model, in recent months joined Chinese smartphone maker Xiaomi to lead its fledgling AI department. Guo Daya, another researcher central to DeepSeek’s previous models, recently joined ByteDance at a much higher pay level, according to Chinese tech outlet Late Post.”

“By raising outside money, DeepSeek could invest more on computing resources to continue working on frontier AI models and could pay more for talent to prevent top researchers from leaving.”

Of course opportunities for US investors still remains limited in China due to US/China geopolitical kerfuffles. Despite a potential Xi/Trump meeting next month:

“As a Chinese startup, some U.S. venture capitalists might hesitate about investing in DeepSeek, according to two of the people familiar with the matter. The company has been accused by the U.S. Congress of aiding Beijing’s military rise, although it hasn’t been added to any U.S. trade blacklist.”

DeepSeek will of course get a lot of global attention on its next AI moves:

“DeepSeek had been planning to release its next flagship model V4 in February, but the timeline has been pushed back several times due to engineering and other difficulties. DeepSeek’s engineers have spent a lot of time making V4 compatible with Huawei Technologies’ chips out-of-box, The information reported. That contributed to the delay, as DeepSeek’s previous models were designed to run on Nvidia chips.”

And the rest of the world is not sitting still:

“Meanwhile, the competitive environment for AI has changed. AI models are evolving at unprecedented pace, and tech giants from both the U.S. and China are increasingly exerting pressure on upstarts thanks to their deep pockets. That might have prompted DeepSeek to change its funding policy and raise money.”

The full piece is worth a read for additional details. But it’s a notable reminder that the US AI industry does not have AI innovation game globally to itself this AI Tech Wave. And what happens in AI in China, does not always stay in China.

So DeepSeek remains a key one to watch this year and beyond. Along with a whole lot of other AI companies large and small in China.

None of them have faded out by a long shot. Stay tuned.

(NOTE: The discussions here are for information purposes only, and not meant as investment advice at any time. Thanks for joining us here)