Chinese AI powerhouse DeepSeek is reportedly advancing plans for a new funding round, targeting $7.4 billion to fuel research and expand its computing infrastructure, according to sources familiar with the matter.
The financing round is expected to value the company at approximately $74 billion, a notable increase from the $50 billion-plus valuation recorded in June of this year. Reports indicate that DeepSeek aims to launch an initial public offering (IPO) next year, with this capital infusion intended to bolster its financial reserves ahead of that milestone.
Existing shareholders are anticipated to maintain their participation, including investment firms Monolith Management and Shixiang, alongside Chinese battery giant CATL. Several funds backed by local government financing platforms are also preparing to join the round.
In its previous fundraising effort, DeepSeek required most investors to channel their capital through a limited partnership managed by founder Liang Wenfeng. However, for this new round, the company is expected to permit a greater degree of direct investment, insiders revealed.
DeepSeek's initial funding round closed in June, raising a total of 51 billion yuan with a post-investment valuation nearing 400 billion yuan, setting a record for the largest single-round financing in China's AI sector. Public records show that founder Liang Wenfeng led that round, with participation from Tencent, CATL, NetEase, JD.com, and IDG Capital, alongside a strategic investment from the National AI Industry Investment Fund.
Sources also indicated that DeepSeek's annual recurring revenue (ARR) has reached roughly $500 million, yet the company remains in a capital-intensive expansion phase, continuously investing in model training, chips, data centers, and talent acquisition. While the firm has not disclosed actual losses or cash burn figures, the scale of this fundraising—approximately 14.8 times its ARR—underscores that the capital required to remain competitive in frontier AI development far exceeds current revenue generation.