China's DeepSeek is considering expanding its latest funding round to as much as 100 billion yuan ($14.9 billion), double its earlier target, with state-backed funds and corporate investors jostling for stakes, people familiar with the matter told CNBC.
The AI startup has fielded strong interest from state-backed funds, investment arms of listed Chinese companies and venture capital firms, according to the two people, who asked not to be named because they were not authorized to discuss the private talks.
But DeepSeek is vetting prospective investors closely, turning away private investment funds raised from individual investors and limiting the pool largely to government and corporate funds, the people said.
The company, which began taking outside capital for the first time this year, initially set a 50 billion yuan target for the current round.
The fundraising process remains fluid, and the amount could still change before talks conclude, the people said. Bloomberg reported earlier Tuesday that DeepSeek is close to securing at least 80 billion yuan, with Tencent and battery maker CATL among the largest backers, and is eyeing an IPO in early 2027.
CATL, Geely Auto and investment managers Monolith Management and Loyal Valley Capital have committed capital in the latest round, one of the people told CNBC.
DeepSeek, CATL, Geely Auto, Monolith Management and Loyal Valley Capital did not respond to CNBC's requests for comment.
The round, initially expected to close by the end of August, has taken longer than planned as some prospective investors waver over the price, one of the people said, though talks are nearing the end.
DeepSeek is seeking a valuation of about 500 billion yuan, or $75 billion, the people said. Its first external funding round, which closed in June, raised about 50 billion yuan. An investor filing related to the round implied a valuation of roughly 350 billion yuan.
From lab to listing
The AI startup triggered a sell-off in U.S. tech stocks in January 2025 after releasing AI models that rivaled American peers at far lower cost. Its latest model, V4.1 Flash, released in September, is designed for greater capability and faster inference, the company said.
DeepSeek's decision to open up to external funding was seen as a sign of AI's ballooning capital demand and mounting pressure to retain talent amid intensifying competition.
Founder Liang Wenfeng told investors at a private meeting in July that he prioritizes pushing the technology toward artificial general intelligence over maximizing profit.
Talks on the current round were briefly suspended after Liang reportedly said in a private investor meeting that Chinese AI companies still lagged far behind their U.S. counterparts and relied heavily on Nvidia chips.
DeepSeek has tapped CITIC Securities to prepare for a possible IPO on Shanghai's STAR Market, Reuters reported in September.
Its domestic rival Moonshot AI is also reportedly targeting an early-2027 IPO after raising at a $50 billion valuation, Bloomberg reported Tuesday.