China’s government-backed ‘Big Fund’ is set to lead a new financing round for AI startup DeepSeek, which could value the scourge of America’s Magnificent 7 stocks at around $45 billion.
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According to an article in the Financial Times, the state-backed China Integrated Circuit Industry Investment Fund, is seeking to lead the fundraising round, but its participants have yet to be finalized. The vehicle, known as the Big Fund, is already a backer of some of China’s largest chip players such as Semiconductor Manufacturing International Corporation.
The involvement of the government in DeepSeek, which rattled the previously serene Magnificent Seven stock prices last year, when it launched its cheaper but just as effective R1 AI model, is significant.
President Xi is determined to come out on top over the U.S. in the AI race and clearly sees public investment in its tech industry as a way to help meet that aim. The Big Fund wants to find and develop alternatives to U.S. tech darlings such as Nvidia (NVDA).
Need for More Growth
It has been previously reported that DeepSeek, which has touted its compatibility with AI chips made by Chinese group Huawei, is in financing talks with other domestic champions such as e-commerce giant Alibaba (BABA) and online group Tencent (TCEHY).
DeepSeek is owned by hedge fund Zhejiang High-Flyer Asset Management, whose cofounder Liang Wenfeng formed the company in 2023.
Since its remarkable arrival last January, DeepSeek has continued to progress with a slew of new low-cost, open source models. It is also said to be close to launching its new, next-generation V4 model.
However, it needs funds to take on the free open-source AI agent software OpenClaw whose software can carry out tasks without human intervention.
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