DeepSeek Halts $71 Billion Fundraising After Founder's Leaked Comments Go Viral
The Chinese AI startup suspended its second funding round following social media circulation of remarks about U.S. chip dependence and China's AI capability gap.
Fundraising Pause Follows Viral Leak
DeepSeek suspended its second fundraising round after comments from founder Liang Wenfeng circulated on Chinese social media, according to reports from Bloomberg, Fortune, and The Next Web. The company was seeking a pre-money valuation of approximately 480 billion yuan ($71 billion).
The leaked remarks addressed China's AI capability gap relative to the United States and DeepSeek's continued dependence on Nvidia processors despite U.S. export controls. Prospective backers were informed to halt the fundraising process.
Previous Funding and Ownership Structure
DeepSeek closed its first funding round in June 2026, raising approximately $7 billion to $7.4 billion (50 billion yuan). That round included investments from Tencent, CATL, and China's National AI Industry Investment Fund, marking one of the largest AI deals in Chinese tech history.
The company is owned by Zhejiang High-Flyer Asset Management, a hedge fund founded by Liang Wenfeng. DeepSeek was founded in 2023.
Hardware Constraints and Strategic Pressure
DeepSeek operates under significant constraints due to U.S. export restrictions on advanced Nvidia processors. The company has reportedly attempted to design its own AI chips to reduce hardware dependency, though it remains reliant on American semiconductor technology.
The viral leak places DeepSeek and its founder in a delicate position with both investors and regulators. The comments highlight tensions between the technical realities of China's AI development and official narratives about closing the gap with American competitors.
IPO Plans Remain on Track
Despite the fundraising pause, DeepSeek is preparing for an initial public offering on Shanghai's STAR Market. According to multiple sources, the company is targeting a filing in late 2026 or early 2027, with a public debut expected in 2027.
The incident underscores the challenges facing Chinese AI companies navigating geopolitical restrictions, investor expectations, and regulatory scrutiny while pursuing ambitious valuations in a rapidly evolving sector.