The AI race in China is intensifying, with DeepSeek in negotiations to secure new funding at a potential valuation of approximately $45 billion. This development comes as the state-supported China Integrated Circuit Industry Investment Fund (Big Fund) aims to spearhead its inaugural external funding round, as reported by the Financial Times.
This proposed valuation represents a significant increase from the roughly $20 billion valuation DeepSeek was assigned just weeks prior, effectively doubling as investor enthusiasm grows regarding the startup’s rapidly advancing large language model (LLM) technologies.
In addition to Big Fund, other investors such as Chinese tech titan Tencent and Flounder are also in talks to acquire a stake, although the final list of investors has yet to be confirmed.
DeepSeek gained considerable attention earlier this year following the debut of its R1 open-source model, branding itself as a formidable competitor to global frontrunners like OpenAI and Anthropic, despite operating with considerably lesser computational resources. Under the leadership of billionaire founder Liang Wenfeng, the company has primarily concentrated on developing cutting-edge models rather than pursuing aggressive commercialization strategies.
For Big Fund, the potential investment in DeepSeek aligns with Beijing’s overarching strategy for semiconductor and AI self-sufficiency. The fund, which has secured approximately $47 billion in its latest funding round, has historically invested in key chipmakers such as Semiconductor Manufacturing International Corporation and Yangtze Memory Technologies Corp., though it has not previously supported LLM developers.
An investment in DeepSeek would indicate a closer alliance between China’s chip manufacturing sector and AI model developers, particularly as the startup fine-tunes its models to operate on local hardware like Huawei’s Ascend chips, part of a larger initiative to decrease dependence on American technology.
Within China, DeepSeek is rising alongside other highly valued AI firms, such as Zhipu AI, which boasts a market valuation of around $52 billion, in addition to various other rapidly evolving labs focused on frontier models.
On a global scale, the potential is immense. According to Statista, the large language models market was valued at $5.6 billion in 2024 and is anticipated to expand at a CAGR of 36.9% from 2025 to 2030, highlighting the rapid influx of capital into this arena.
