China’s Big Fund in talks to lead DeepSeek round at $45B valuation

DeepSeek Nears $45 Billion Valuation as China’s Big Fund Leads Talks

China’s largest state-backed semiconductor investment vehicle is in advanced negotiations to lead the first external funding round for AI startup DeepSeek at a valuation of approximately $45 billion, the Financial Times reported on Tuesday, citing four people familiar with the discussions.bloomberg

The China Integrated Circuit Industry Investment Fund — known in the industry as the “Big Fund” — would mark a dramatic expansion of its mandate, which has historically focused on chip fabrication, memory producers, and semiconductor equipment rather than AI model labs.thenextweb

From $10 Billion to $45 Billion in Three Weeks

The valuation represents a remarkable surge. When DeepSeek first opened fundraising talks in mid-April, it was targeting at least $300 million at a $10 billion valuation, according to The Information and Reuters. By late April, with Alibaba and Tencent entering negotiations, the figure rose above $20 billion. With the Big Fund now engaged as potential lead, it has climbed to roughly $45 billion — more than four times the original mark.yahoo

China’s national AI fund is also reportedly participating in the round alongside the Big Fund. Neither DeepSeek, the Big Fund, Tencent, nor Alibaba has publicly commented, and the round has not closed.yahoo

A Strategic Shift for Beijing

The Big Fund assembled $47 billion from China’s finance ministry, local governments, and state-owned banks in its third funding phase in 2024. A direct investment in a frontier AI lab would represent the clearest signal yet that Beijing views model capability — not just chip manufacturing — as central to its AI strategy, particularly as US export controls continue to restrict China’s access to advanced GPUs.ft

DeepSeek was founded in July 2023 by Liang Wenfeng, co-founder of quantitative hedge fund High-Flyer Capital Management, and had been entirely self-funded until now. The company launched DeepSeek V4, its trillion-parameter flagship model, on April 24, the same week funding negotiations became public.thenextweb

What Comes Next

The involvement of a state-backed lead investor could reshape DeepSeek’s trajectory. Analysts note that Chinese state vehicles typically bring access to government customers, regulatory protection, and strategic alignment expectations — but may also impose constraints on the company’s unusually open approach to releasing model weights and technical documentation.thenextweb

The deal’s final terms, including whether Tencent and Alibaba will participate at the elevated valuation and how governance rights will be structured, remain unresolved.thenextweb