AI: DeepSeek comes back for Seconds. AI-RTZ #1148

Well, that was fast, even at the pace of things this AI Tech Wave. China’s AI ‘wonder kid’ DeepSeek, is back for more funding, less than a month after its first big one, raising $7 billion pluson a $60+ billion valuation.

As I’ve outlined in detail, both the Chinese and the US set of leading AI tech companies are running independently at a breakneck pace. China especially on the open source AI front. And even there things are changing, as I noted in this piece on the other China open source AI leader, Alibaba.

Coming back to DeepSeek, the FT outlines the latest in “DeepSeek weighs new fundraising a month after closing first round”:

“DeepSeek is considering raising new funds just one month after closing its first round, as China’s leading AI lab seeks to accelerate expansion of its infrastructure. The Hangzhou-based start-up completed its first-ever round of financing around the end of May, which raised about $7bn at a valuation of $52bn, including the raised funds, according to three people with knowledge of the matter.”

“DeepSeek this week started preliminary talks with new investors about opening another round that would value the company at about $71bn before the deal, two of the people said. That would represent a 37 per cent jump in valuation, although details of the new round are yet to be finalised. DeepSeek’s unusually swift pace of fundraising stems from expectations of increased capital expenditure to build its own data centre and purchase more AI chips, according to the people.”

Part of the driver is product expansion, from AI chatbot to AI Agents, with reasoning of course.

“Its push into building AI agents, which can perform tasks autonomously, is leading to much higher demand for computing power. Founder Liang Wenfeng put about $3bn of his own money into the AI lab in the previous round as the largest investor, the people said. Other investors included battery maker CATL, tech groups Tencent, JD.com and NetEase, and venture capital funds including IDG, Monolith and Shixiang.”

Of course China is taking a piece of it, as the US considers similar moves with its top US AI companies like OpenAI.

“The state-backed national AI fund, a subsidiary of China Integrated Circuit Industry Investment Fund, the country’s strategic semiconductor investor, also became a minority shareholder of DeepSeek.”

“The proceeds from the first round are being used to beef up DeepSeek’s infrastructure and hire more AI researchers, as competition to build the best models intensifies in China and beyond. DeepSeek plans to double the size of many of its core teams, joining a fierce talent war as it seeks to commercialise its frontier research.”

The other driver is of course adding more AI Talent in the world’s 2nd largest AI market, a global imperative indeed.

“The company said last month it had launched a recruitment drive to “expand every department”. DeepSeek emerged as a leader in China’s AI research last year after the release of its open-source R1 reasoning model, which demonstrated performance comparable to leading western systems but was trained using more efficient methods.”

Other China AI companies are of course on their own tear to raise funds, both private and public.

“Competition among Chinese AI groups has increased in recent months, with rivals including Zhipu AI and Moonshot AI releasing improved open-source models that have been rapidly adopted by developers. The Chinese labs are also seeking to catch up with global leaders such as Anthropic and OpenAI, which have far more resources in terms of computing power and capital.”

The whole episode highlights the frenetic pace of AI fund raising in both countries. A trend to accelerate this AI Tech Wave in 2026 and beyond. 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)