DeepSeek plans fundraising at $74 bln valuation ahead of STAR Market IPO

Reuters Wed, July 15, 2026 at 2:58 AM PDT | 3 min read

HONG KONG/BEIJING – Chinese AI startup DeepSeek is planning to launch a new fundraising round at a valuation of approximately 500 billion yuan ($74 billion) ahead of a potential initial public offering on the mainland, according to two people with knowledge of the matter.

The plan comes just weeks after the Hangzhou-based company—which drew global attention in 2025 for its low-cost AI models—raised about $7.4 billion in June at a post-money valuation of roughly 450 billion yuan, the sources said.

Investor Demand and Rising Costs

The back-to-back fundraising plans underscore strong investor appetite for one of China's most closely watched AI companies. However, they also highlight the rising costs of competing in the AI sector, which demands significant computing power, data-center capacity, and engineering talent.

DeepSeek is looking to raise as much as 50 billion yuan in the new funding round, according to a third person briefed on the matter.

IPO Preparations Underway

The company has also begun early deliberations on a potential IPO on Shanghai's Nasdaq-style STAR Market, the three sources and two other people with knowledge of the plan said.

DeepSeek has set an internal target to complete an IPO filing this year, one of the sources added.

All sources declined to be identified because the information is not public. The fundraising and IPO plans remain at early stages, and terms and timetables may change, they noted.

DeepSeek did not immediately respond to a request for comment.

Bloomberg News first reported on Tuesday that DeepSeek was preparing for a possible IPO filing, while the Financial Times reported that the company was considering a fresh fundraising round at a valuation of at least 480 billion yuan.

Rising Costs and Strategic Shift

DeepSeek shook global technology markets last year after releasing models that appeared to rival leading U.S. systems at lower training and operating costs.

Shortly after its maiden fundraising round in June, DeepSeek announced plans to double staff across departments, including data centers and AI agents—systems capable of performing tasks with limited prompting.

Some of these initiatives will require significant capital expenditure. Reuters reported earlier this month that DeepSeek was exploring the development of its own AI inference chip and had discreetly increased hiring of chip-design engineers for the project.

DeepSeek had long stood out in China's AI sector for rejecting outside funding. Founder Liang Wenfeng had largely bankrolled the company using his quantitative hedge fund, High-Flyer, before its recent external financing, sources previously told Reuters.

However, the cost of staying at the frontier of AI has risen sharply, forcing a change in strategy.

Competitive Landscape

Over the past year, DeepSeek has faced stiff competition at home from tech giants including ByteDance and Alibaba, as well as well-funded AI startups such as Z.ai, Moonshot, and MiniMax.

Key Investors in June Round

In the June funding round, DeepSeek founder Liang personally committed 20 billion yuan, while Tencent Holdings and battery giant CATL contributed 10 billion yuan and 5 billion yuan, respectively, becoming the largest external shareholders, Reuters reported at the time.

Other investors include:

• China's national AI fund
• Gaming developer NetEase
• E-commerce giant JD.com
• Investment firms: IDG Capital, Loyal Valley Capital, Monolith Management, and Shixiang Capital

The participation of the state-backed AI fund highlighted DeepSeek's strategic importance to Beijing's efforts to build domestic AI champions and reduce reliance on foreign technology.

(Reporting by Hong Kong and Beijing newsrooms; editing by Philippa Fletcher)

($1 = 6.7704 Chinese yuan renminbi)