DeepSeek raises US$15 billion in challenge to leading US labs
Sign up now: Get ST's newsletters delivered to your inbox
Chinese AI DeepSeek has the ability to compete with US AI models at a fraction of the latter’s costs.
PHOTO: REUTERS
- DeepSeek raised about 100 billion yuan (S$19.13 billion), one of China’s largest fundraisings, as it aims to compete globally with Anthropic and OpenAI.
- The round drew major backers including CATL and Tencent, and the startup may be preparing for an IPO, Bloomberg News reported.
- DeepSeek is spending more on AI data centres and open-source models, while its low-cost releases keep pressuring rivals in China and overseas.
AI generated
The Chinese AI pioneer DeepSeek has raised about 100 billion yuan (S$19.13 billion) in its latest fund-raising round, one of the country’s largest ever and a sign of the start-up’s ambitions to compete globally with the likes of Anthropic PBC and OpenAI.
The Hangzhou-based firm boosted its financing target at least twice as it talked with investors, from 50 billion yuan to 80 billion yuan before reaching the final tally, according to people familiar with the matter.
Battery pioneer Contemporary Amperex Technology and WeChat-operator Tencent Holdings were among the biggest investors in the round, said the people, asking not to be named as the details are not public.
DeepSeek’s funding sets the stage for one of the most highly anticipated Chinese market debuts in years.
The AI upstart triggered a US$1 trillion (S$1.28 trillion) meltdown in global markets in 2025 when it showed the ability to compete with Silicon Valley’s leaders at a fraction of the cost of their models, but it has never had the financial resources of the US frontier labs.
The latest fund raising shows that imbalance is beginning to moderate, although it still has far less financial firepower than Anthropic and OpenAI, which have each raised more than US$100 billion.
Like rival Moonshot, DeepSeek is preparing for an initial public offering that would be an important milestone for Chinese markets, Bloomberg News has reported.
DeepSeek has begun to spend more aggressively to build out AI data centres and to develop more open-source models for use in China and abroad.
The firm has regularly rolled out high-performance, low-cost models that put pressure on its domestic competitors and gained customers in the US and other overseas markets.
In September, for example, it dropped V4.1 Flash, setting off a drop in the share prices of local rivals MiniMax Group and Z.AI.
DeepSeek, Tencent and CATL representatives did not respond to e-mailed requests for comment.
More broadly, companies from Alibaba Group Holding to ByteDance have introduced low-cost AI services, typically open-sourced so customers can modify them as needed.
One widely shared benchmark chart from Artificial Analysis sketched out what has been called the “DeepSeek death zone”, where competitors will struggle to survive if they cannot beat the firm’s performance or they cannot charge lower prices. BLOOMBERG