DeepSeek, the cheap-AI upstart, is raising at least $12 billion

DeepSeek, the Chinese lab known for building strong AI models on comparatively small budgets, is close to raising at least $12 billion, Bloomberg reported Tuesday. It would be the lab's second big raise this year, after it took outside money for the first time in a round disclosed in July.

Tencent and the battery maker CATL are among the biggest backers, according to people familiar with the matter cited by Bloomberg. DeepSeek set out to raise a good deal less. Investors pushed for bigger stakes after its latest model launched, and term sheets already signed could lift the total toward 100 billion yuan (roughly US$14 billion). Nothing is final yet. The round hasn't closed and DeepSeek hasn't announced it, whatever some headlines suggest. DeepSeek, Tencent and CATL did not immediately respond to Reuters' requests for comment.

DeepSeek's low-cost reputation rests on a specific claim. Its V3 technical paper put the final training run at roughly 2.8 million GPU hours on Nvidia (NVDA) H800 chips, and noted that the figure leaves out earlier research and experiments and prices the chips as rentals rather than counting what they cost to buy. When its R1 model followed, it set off a wave of worry over cheap Chinese AI, The Next Web notes. Bloomberg reports that much of the new money is expected to go to computing hardware. In September, Bloomberg reported that DeepSeek plans to deploy at least 160,000 of Huawei's Ascend 950DT chips at a data center it's building in Inner Mongolia, to run its models rather than train them, which could be one of the largest known clusters of Huawei AI chips.

Who owns the company is shifting too. DeepSeek's first outside round raised about 50 billion yuan (US$7.4 billion) at a post-money valuation of more than 350 billion yuan (roughly US$52 billion), according to a regulatory filing reported by Caixin in July. Founder Liang Wenfeng was the largest investor in that round, putting in 20 billion yuan (around US$2.8 billion) of his own money alongside Tencent, CATL, JD.com (JD) and NetEase (NTES), and he still controls around 91% of the company, Caixin reports. China's national AI investment fund also took part, The Next Web reports. The round Bloomberg describes now is a separate, second raise: DeepSeek first aimed for about 50 billion yuan this time too, then demand pushed the total higher. DeepSeek has also hired CITIC Securities to prepare a possible listing on Shanghai's STAR Market, though timing, size and valuation are still undecided. Bloomberg points to early 2027. Treat that as a target, not a date.

Next, watch the final size of the round and whether DeepSeek confirms it. Then watch the Huawei chips: Bloomberg says the installation timeline depends on how fast Huawei can produce them. And once public shareholders are in the picture, watch whether DeepSeek keeps releasing its models openly.