DeepSeek Nears Completion of Approximately 100 Billion Yuan Financing, Twice Its Initial Target

Chinese artificial intelligence (AI) startup DeepSeek is nearing completion of a funding round worth approximately 100 billion yuan (19.87 trillion won), Reuters reported on Oct. 22 local time. The amount is roughly double its initial target of 50 billion yuan.

Fifteen major Chinese companies, including GigaDevice, Meituan and Geely, have joined existing investors such as CATL and Tencent, bringing together capital and supply chains across China’s AI industry around DeepSeek. The investment is drawing attention as Chinese semiconductor, battery, automotive and internet platform companies fund an AI model developer amid intensifying competition between China and the US for AI leadership.

During DeepSeek’s first external funding round in June, when it raised $7.4 billion, its estimated valuation was reported at between 350 billion and 450 billion yuan. If the pre-money valuation remains at 500 billion yuan and the company completes the 100 billion yuan fundraising, its post-money valuation could reach 600 billion yuan (approximately 119.23 trillion won). Final investment terms and valuation have yet to be determined.

Reuters noted that many investors were backed by the government or major corporations, reflecting China’s determination not to fall behind the US in AI competition. Market research firm Omdia said DeepSeek could become a central pillar of China’s domestic technology supply chain, given that all the investors are Chinese companies and key component suppliers.

The Chinese government is also actively working to strengthen the country’s AI industry and ecosystem. According to reports published in early September by the Financial Times and The Wall Street Journal, citing a US-China Economic and Security Review Commission (USCC) report titled The People’s Republic of Data, Beijing regards data as a strategic economic asset and is establishing a state-led framework for data trading, valuation and utilization.

Increase in DeepSeek’s fundraising target during its October investment round. (Source: FourWeekMBA)

China formally designated data as a key factor of production in 2020. It subsequently launched the Shanghai Data Exchange in 2021, with the number of exchanges expanding to approximately 40, including those in Beijing and Shenzhen. The government established the National Data Administration in 2023, revised accounting standards in 2024 to allow companies to recognize data assets on their balance sheets, and introduced Trusted Data Spaces (TDS) in late 2024. More recently, it established the National Data Group (NDG).

While existing data exchanges serve as commercial marketplaces for trading data rights and determining prices, TDS provides a secure data-sharing framework incorporating technical safeguards. NDG is responsible for integrating data resources nationwide and establishing a shared data resource system for AI.

State-owned NDG serves as a national platform that directly cleans and standardizes public and industrial data fragmented across multiple TDS networks, facilitating data flows and sharing between industries and regions. In effect, it supplies the data needed for AI development at the national level. The National Data Administration, established in 2023, handles policy design, while NDG oversees market operations and implementation. Notably, China’s three major telecommunications operators and state-owned power grid companies are shareholders in NDG, bringing together data transmission infrastructure, power and data resources at the national infrastructure level.

Meanwhile, the US Department of Homeland Security (DHS) recently prohibited the use and procurement of DeepSeek models across civilian government IT systems, including third-party services incorporating DeepSeek technology, citing national security and data leakage risks.