DeepSeek is in talks to raise its first round of venture capital, with its potential valuation jumping in a few weeks from $20 billion to $45 billion, according to reports cited by TechCrunch. The round is said to be led by the state investment vehicle China Integrated Circuit Industry Investment Fund, while Tencent and Alibaba are also reportedly in talks to participate. The money chase shows how quickly a supposedly cutting-edge AI lab gets folded into the machinery of state-backed capital and cloud giants once it becomes useful enough to the market.
Who Has the Power
DeepSeek was founded by Chinese hedge fund billionaire Liang Wenfeng, who controls nearly 90% of the company. The lab has not previously sought out investors. Sources cited in the reports said Liang decided to raise funds because competitors were poaching DeepSeek’s researchers and he wanted to offer employees shares in the company. That is the whole arrangement in miniature: one billionaire holds nearly all the control, then turns to outside capital when the talent war gets expensive and ownership needs to be used as a leash.
DeepSeek came to prominence in early 2025 after launching a large language model that trained on a fraction of the compute power and at a fraction of the cost of big U.S. models from OpenAI and Anthropic. It has since kept reasonable pace with the top models in the world in reasoning and coding while remaining open weight, with versions freely available on Hugging Face. The company has been optimized to run on chips made by Huawei Technologies. China is seeking to fund homegrown AI technology to sidestep the difficulty of obtaining U.S. technology, particularly chips.
Who Gets Folded In
The reported participation of China Integrated Circuit Industry Investment Fund, Tencent and Alibaba places DeepSeek inside a wider contest over who controls the infrastructure of AI. The state investment vehicle is not appearing as a neutral backer, but as part of a push to finance homegrown AI technology. Tencent and Alibaba, meanwhile, are the cloud giants circling the project as it becomes more valuable. The result is a familiar hierarchy: public money, private monopolies, and a founder with near-total control all converging around the same machine.
In public markets, the AI trade has broadened as investors look deeper down the supply chain. RBC Wealth Management's Jasmine Duan warned that the current AI rally may be vulnerable to crowded positioning in the near term. Duan said she remains bullish over the longer-term outlook, arguing that sustained AI capex, rapid advances in capabilities and earnings growth should support another leg higher. The language is polished, but the logic is simple enough: more capital, more spending, more extraction, more upside for those already positioned to collect it.
What the Market Calls Progress
The Wall Street Journal coverage described a broad AI-driven rally in stocks extending to suppliers across the supply chain, including a long established glassmaker and a toilet manufacturer, and said AI activity was helping push the S&P 500 to new highs around the time of the piece. AMD earnings were also referenced as part of the drivers of the rally. The market’s appetite keeps widening, pulling in more suppliers and more sectors as investors hunt for the next place where AI can be turned into a stock story.
DeepSeek’s reported fundraising comes as the company is already being treated as part of a larger strategic race, not just a lab with a model. The valuation leap from $20 billion to $45 billion in a few weeks shows how fast capital can reprice a project once it is seen as useful to state strategy, corporate competition, and speculative markets all at once. The people doing the actual work remain inside a structure where nearly 90% sits with one billionaire, while the rest of the ecosystem lines up to profit from the same arrangement.