DeepSeek has opened discussions with external investors about a potential first outside funding round that would target at least $300 million, with a valuation floor of $10 billion, according to four people familiar with the matter.
The AI company has been financed exclusively by its owner, Chinese hedge fund High-Flyer Capital Management, which covered the startup's costs while it developed its AI models. That internal funding approach changed as DeepSeek began to engage potential external backers after previously turning down multiple offers from some of China’s largest venture capital firms and technology companies.
DeepSeek's flagship model, R1, attracted attention last year among participants in Silicon Valley and Wall Street, a response that the company and its owner appear to be leveraging as they consider outside capital. Sources said the startup's outreach aims to secure resources to continue advancing its AI model efforts and to position the company in the broader field of AI development.
The reported discussions are characterized as the first time DeepSeek has sought outside investment since its founding. Until now, all funding came from High-Flyer Capital Management, which supported the firm's operations during the period it built and refined its models.
People close to the conversations described the current outreach as exploratory talks with potential investors. The company had previously declined multiple funding overtures from top tier venture capital firms and technology companies in China, choosing instead to rely on its parent for financial support while developing its core technology.
With R1 having drawn interest from both technology and financial market observers, the reported fundraising discussions indicate a shift in the company’s capital strategy as it opens the door to external partners. The objective, as reported by those familiar with the matter, is to raise new capital to support the company's role in developing AI models.
Note: The reporting referenced here was described by four people familiar with the situation. Details on potential investors, timing, or the terms beyond the targeted amount and valuation were not provided in the information cited.