Tencent, Alibaba discuss first round of funding for DeepSeek

According to The Information, China's AI big model unicorn DeepSeek is initiating its first external financing since its establishment, with Tencent and Alibaba, two major tech giants, taking the lead in discussions, with a target valuation as high as $20 billion.

DeepSeek, incubated by Hifun Quantitative, had long refused external capital involvement and this financing plan aims to raise no less than $300 million.

The company initially targeted a valuation of $10 billion, which was later raised to the $20 billion level. Referring to other leading big model enterprises in China, Moon's Dark Side has the latest financing valuation of $18 billion, and both MiniMax and ZhiPu AI have market values exceeding $30 billion after going public.

On the technical front, DeepSeek's R1 model has achieved world-class performance at a low cost. The new V4 model is being adapted to domestic chips such as Huawei's Ascend and Cambricon, originally scheduled for release in February 2026 but delayed due to engineering issues.

It is reported that the financing funds will mainly be used for computational power procurement and talent retention. The company has not yet achieved scaled revenue and the model remains open source, offering services to users for free.

Tencent and Alibaba's entry into this financing round is a combination of strategic and financial considerations, as both have already invested in several leading AI enterprises such as ZhiPu AI and MiniMax, tying up with DeepSeek can complement their shortcomings in the big model ecosystem.

DeepSeek has seen several core researchers leave in recent months. The clear market pricing from this round of financing may help the company retain core talents with stock options.

The current competition in the domestic big model race is intensifying, with the cost of computing power and talent continuously increasing. DeepSeek's capitalization process marks a new phase in the Chinese AI industry, shifting from a technology competition to a dual drive of capital and technology.