Tencent and Alibaba in Talks to Invest Over $20 Billion in DeepSeek

On April 22, according to monitoring by Dongcha Beating, The Information cited four informed sources stating that Tencent and Alibaba are in talks to invest in DeepSeek. DeepSeek is owned by the quantitative hedge fund Huanfang Quantitative and has never accepted external funding before. The Information reported last Friday that DeepSeek launched its first round of financing, targeting at least $300 million with a valuation of no less than $10 billion; due to strong interest from potential investors, the valuation target has now risen to over $20 billion. Negotiations are ongoing, and both the valuation and financing amount may change. Sources indicate that the $20 billion pricing is partly based on the new round of $18 billion valuation being finalized for Moonlight. Competitors MiniMax and Zhizhu were both valued at less than $10 billion when they went public in Hong Kong this January, but Zhizhu’s market value has now exceeded $50 billion, while MiniMax is over $30 billion. However, DeepSeek has not yet generated meaningful revenue, its model remains open-source, and its chatbot is available for free. Founder Liang Wenfeng has refrained from bringing in external funding for many years, but the shift is driven by multiple pressures: the next-generation flagship model V4 was originally scheduled for release in February but has been postponed multiple times due to engineering challenges; in recent months, core researchers have left for Chinese tech giants; V4 is currently being trained on NVIDIA’s Blackwell chips, which have been banned from export to China by the U.S., and the team has spent months adapting the model for Huawei and Cambricon chips. Tencent and Alibaba have previously invested in leading Chinese AI companies such as Zhizhu, MiniMax, and Moonlight.