Key Points #
- DeepSeek is planning a new funding round at a $71 billion valuation to build its own data centers and buy AI chips.
- The fresh capital would fund an aggressive expansion strategy. Permanent rock-bottom pricing on its new V4 models is driving rapid growth among US businesses.
- While DeepSeek still trails Western frontier models on performance, domestic pressure is mounting too, with Chinese rivals like Zhipu AI, MiniMax, and Moonshot AI all pushing hard.
DeepSeek is already raising again. The Chinese AI lab just closed its first funding round and needs capital for its own data centers and chips to keep its aggressive pricing strategy going.
DeepSeek closed its first round in late May at roughly $7 billion, valuing the company at $52 billion, the Financial Times reports. Now the Hangzhou-based startup is in early talks with new investors for a round at a pre-money valuation of about $71 billion. The money would go toward building its own data centers and buying AI chips. At the same time, DeepSeek is developing its own inference chip to reduce its reliance on Nvidia and Huawei. Founder Liang Wenfeng put in about $3 billion himself, making him the largest backer. Other investors include CATL, Tencent, JD.com, NetEase, and China's state-backed AI fund.
Cheap pricing demands deep pockets
The need for capital is tied directly to DeepSeek's aggressive expansion. The company recently released V4-Pro and V4-Flash, the largest open-weights models with up to 1.6 trillion parameters. The rock-bottom V4-Pro prices have been made permanent and come in at roughly eleven times cheaper than GPT-5.5 on input.
The strategy is working. According to US financial services firm Ramp, which tracks real spending across more than 50,000 companies, DeepSeek was among the fastest-growing software vendors among US businesses in June. Ramp did flag security risks, though, since companies are sending data directly through DeepSeek's platform.
Meanwhile, the performance gap with Western leaders has widened. OpenAI's GPT-5.6 Sol and Anthropic's Claude Mythos have reached a new tier that DeepSeek can't match yet. Still, the gap in performance is far smaller than the gap in price.
Competition inside China is heating up fast. Zhipu AI released GLM-5.2, an open-source model that trails Anthropic's Opus models by only a few percentage points on hours-long coding tasks and is gaining traction with enterprises. MiniMax is reportedly working on a 2.7 trillion-parameter model that could ship as early as Q3. And Moonshot AI, the company behind Kimi, is looking for fresh capital at a valuation of up to $30 billion. The race among Chinese AI labs has never been this intense.
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