DeepSeek, the Chinese AI lab that rattled Western tech markets earlier this year, is in advanced discussions for its first formal funding round, targeting $3–4 billion at a valuation between $45 billion and $50 billion. China's National Integrated Circuit Industry Investment Fund — known as the 'Big Fund' — is in talks to lead the round, with Tencent among the reported co-investors. The deal would mark the Chinese government's most direct financial stake yet in one of its highest-profile AI champions.
State backing from China's Big Fund signals Beijing is treating DeepSeek as strategic national infrastructure, not just a startup — which could accelerate its compute access and regulatory protection. For investors, this intensifies the competitive pressure on US AI names like Nvidia (supply-chain exposure to China), Microsoft, and Google, whose AI premium valuations rest partly on assumed Western dominance. It also raises the stakes for Chinese tech holdings like Tencent, which could gain meaningful upside if the round closes at these terms.
Watch for formal closing announcement of the funding round (no fixed date confirmed, but negotiations are active). Nvidia earnings: May 28, 2025 — guidance on China demand will be telling. Any US export control updates targeting AI chips to China, which could reshape DeepSeek's hardware access.
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