China's DeepSeek Secures Massive New Funding Despite Washington's Warnings
The Hangzhou-based AI lab has raised approximately $15 billion in a new round, a move that coincides with a sudden U.S. directive to remove its software from federal systems.
By Anna Nowak ·
For Americans who rely on government services, the practical impact of recent tech policy shifts may remain subtle, but the financial stakes are becoming increasingly visible. Just two days after the U.S. government ordered federal civilian agencies to strip DeepSeek’s artificial intelligence technology from their infrastructure, the Chinese firm secured a massive new capital injection. According to Bloomberg, the company raised approximately $15 billion, a sum that equates to roughly 100 billion yuan. This transaction stands as one of the largest funding rounds in China’s tech history, signaling a significant escalation in the global AI landscape.
The timing of this capital raise has raised questions about the immediate impact of the U.S. security directive. The federal order, which cited safety concerns, required agencies to eliminate the company's tools from their networks. Yet, the reported investment suggests that the company’s momentum is undiminished. Bloomberg identified several high-profile entities as potential investors in this round. These include CATL, a major Chinese battery manufacturer, and Tencent, the tech giant known for developing the WeChat messaging platform.
This latest infusion of cash follows a rapid series of financial milestones for the startup. In June of this year, DeepSeek closed a round that brought in more than $7 billion, valuing the company at $50 billion. By July, reports indicated that the firm was seeking an additional $1.5 billion, which would have placed its valuation at approximately $71 billion. At that time, the company also outlined plans for a potential initial public offering in China, with a target date as early as next year.
DeepSeek is currently based in Hangzhou and is aggressively expanding its operations. The company is increasing its expenditures on AI infrastructure and is developing open models intended for both domestic and international markets. This strategic push continues even as the company navigates new restrictions in the United States. Analysts suggest that this expansion is likely to intensify competition among rival AI firms within China, as DeepSeek seeks to solidify its market position.
The broader context of this funding round reflects a global trend where investors are committing billions to AI startups to maintain a competitive edge. China is no exception to this pattern. Moonshot AI, the developer behind the Kimi model, secured $2 billion in May at a $20 billion valuation. Earlier this month, Manus AI raised more than $500 million. Additionally, two other Chinese AI companies, Zhipu AI and MiniMax, which both listed on the Hong Kong stock exchange in January, now hold market capitalizations of roughly $29 billion and $7.2 billion, respectively.
The origins of DeepSeek trace back to 2023, when it was founded by Liang Wenfeng. Liang previously co-founded High-Flyer, a Chinese quantitative hedge fund that provided the initial financial backing for the startup. The company gained widespread international attention in early 2025 when it released a free-to-use, open-weight reasoning model. This release challenged the prevailing dominance of U.S.-based AI companies and sparked a broader conversation about the accessibility of advanced AI tools.
Ownership structure remains a key point of interest for stakeholders. Following the earlier funding round in June, corporate ownership data analyzed by WireScreen indicates that Liang Wenfeng retains an estimated 81.6% stake in the company’s Chinese operating entity. This high level of control suggests that the founder continues to hold significant influence over the company’s strategic direction, even as external investors pour billions into the venture.
As the U.S. and China continue to navigate their respective regulatory and market strategies, the actions of major AI players like DeepSeek will likely be watched closely. The company did not immediately respond to a request for comment regarding the new funding round or the recent federal directive. For now, the focus remains on how this capital will be deployed to build infrastructure and compete in a rapidly evolving global market.
Source: TechCrunch
