China AI race heats up: Why DeepSeek is doubling its mega-funding round to target $15 billion

The AI startup has reportedly attracted interest from state-backed investment funds, investment arms of listed Chinese companies and venture capital firms.

Chinese artificial intelligence startup DeepSeek is considering doubling the size of its latest funding round to as much as 100 billion yuan ($14.9 billion), as state-backed funds and corporate investors compete for stakes in the fast-growing AI company, according to a CNBC report citing people familiar with the matter.

DeepSeek had initially targeted around 50 billion yuan for the fundraising round. However, strong investor interest has prompted the company to consider expanding the size of the round, although the final amount could change as discussions continue.

DeepSeek screens investors for funding round

The AI startup has attracted interest from state-backed investment funds, investment arms of listed Chinese companies and venture capital firms, according to the report.

However, DeepSeek is reportedly being selective about the investors it allows into the round. The company has turned away private investment funds that raise capital from individual investors and is largely limiting participation to government-backed and corporate funds.

DeepSeek began accepting external capital for the first time this year as competition in China's AI sector intensified and the cost of developing increasingly advanced models continued to rise.

DeepSeek valuation could reach $75 billion

Bloomberg reported earlier that DeepSeek was close to securing at least 80 billion yuan in funding, with technology giant Tencent and battery maker CATL among its major potential backers.

CATL, Geely Auto and investment managers Monolith Management and Loyal Valley Capital have committed capital to the latest funding round, according to CNBC.

DeepSeek is seeking a valuation of around 500 billion yuan, equivalent to approximately $75 billion, according to the report.