Tencent and Alibaba are in talks to invest in DeepSeek at a valuation of over $20 billion

BlockBeats News, April 22nd. According to BlockBeats Monitor, citing four sources familiar with the matter, Tencent and Alibaba are in talks to invest in DeepSeek. DeepSeek, held by the quantitative hedge fund Magic Square Quant, has never accepted external funding before. Last Friday, The Information first reported that DeepSeek had initiated its first round of financing, aiming for at least $3 billion with a valuation of no less than $100 billion. Due to strong interest from potential investors, the valuation target has now increased to over $200 billion.

The negotiations are still ongoing, and both the valuation and the funding amount may change. Insiders stated that part of the $200 billion pricing is based on a new round of $180 billion valuation that Month of Shadows is finalizing. Competitors MiniMax and Wisdom Map, when listed on the Hong Kong Stock Exchange in January, were valued at less than $10 billion each. Currently, Wisdom Map has a market cap of over $50 billion, and MiniMax over $30 billion. However, DeepSeek has not yet generated any meaningful revenue, with its model continuously open-source and its chatbot freely accessible.

Founder Liang Wenfeng, who had refrained from external fundraising for many years, decided to pivot due to various pressures: the next-generation flagship model, V4, originally scheduled for release in February, has been delayed multiple times due to engineering challenges; in recent months, key research personnel have defected to Chinese tech giants; V4 is currently being trained on the Nvidia Blackwell chip, which the U.S. has banned from being exported to China. The team also spent months adapting the model to Huawei and Cambricon chips. Tencent and Alibaba have previously invested in Wisdom Map, MiniMax, Month of Shadows, and other leading AI companies in China.