China’s DeepSeek reportedly raises $7.4B in funding at $50B+ valuation

Chinese AI lab DeepSeek has raised more than $7.4 billion in new funding, valuing the company at over $50 billion, according to reports from *The Information* and *Wall Street Journal*. The funding round, which includes a $3 billion personal contribution from founder and CEO Liang Wenfeng, positions DeepSeek as China’s most valuable AI startup. Sources suggest Tencent Holdings Ltd may invest around $1.48 billion, with most participants depositing capital into a limited partnership managed by Liang. DeepSeek, officially Hangzhou DeepSeek Artificial Intelligence Basic Technology Research Co. Ltd., gained prominence in January 2025 with the release of its advanced reasoning model, R1. The model’s efficiency—delivering near-o1-level performance from OpenAI while requiring far less hardware—triggered a selloff in chip stocks, temporarily reducing Nvidia’s market cap by 15%. In April, DeepSeek introduced DeepSeek-V4-Pro, a successor model with 1.6 trillion parameters and a mixture-of-experts architecture that activates only 284 billion parameters per query. Trained on over 32 trillion tokens, V4-Pro reduces memory usage by processing 1 million-token prompts with a KV cache one-tenth the size of its predecessor, DeepSeek-V3.2. The company’s cost-efficient algorithms have drawn attention from Microsoft, which is reportedly integrating a customized DeepSeek model into its Cowork Copilot application. Microsoft plans to use a fine-tuned version of DeepSeek V4 or another open-source model to offer a lower-cost alternative to OpenAI and Anthropic’s current solutions. The tech giant aims to deploy the model in the coming weeks, leveraging DeepSeek’s hardware efficiency to cut inference expenses. DeepSeek operates as a subsidiary of hedge fund High-Flyer and has rapidly advanced its technology, challenging Western AI leaders with open-source models that rival proprietary systems. The latest funding round underscores its rapid growth and strategic importance in China’s AI sector, while partnerships like Microsoft’s highlight its potential to reshape global AI infrastructure.