Chinese technology tyro DeepSeek is reportedly in discussions to receive an injection of funds from domestic peers Tencent (TCEHY) and Alibaba (BABA), which will value it at over $20 billion.
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DeepSeek’s First Raise
According to a report in The Information, this marks the first capital raise by DeepSeek, which rattled U.S. stock markets, and the Magnificent Seven last year, with its cheaper but just as effective R1 large language model.
The Information had reported earlier that DeepSeek had been looking to raise $300 million at a valuation of at least $10 billion. None of the mentioned companies commented for The Information piece.
DeepSeek is owned by the Chinese hedge fund Zhejiang High-Flyer Asset Management, whose co-founder Liang Wenfeng formed the firm back 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.
DeepSeek Needs Funds
However, it needs funds to take on the free open-source AI agent software OpenClaw. Its software can carry out tasks without human intervention.
Alibaba may be best known for its e-commerce arm, but it is also a big player in the world of Artificial Intelligence. Recent updates around Alibaba’s Qwen app and its cloud unit show the company moving beyond simple chat tools toward AI that can handle real tasks.
Tencent also recently said it was set to double its investment in AI to more than $5.2 billion this year. The focus will be on model training, talent acquisition and ramping up the marketing of its AI agent services.
Chinese tech companies looking to bolster each other’s business will also go down well in the Chinese government where President Xi is determined to beat rival U.S. in the race for AI leadership.
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