Chinese technology companies Tencent Holdings and Alibaba Group are in discussions to invest in artificial intelligence startup DeepSeek, according to a report by The Information (22/04).

The report, citing four people familiar with the matter, said the talks are ongoing. The companies involved did not immediately respond to requests for comment, while the information could not be independently verified.

DeepSeek Seeks Funding at Over $20 Billion Valuation

DeepSeek, which is owned by High-Flyer Capital Management, is aiming to raise funding at a valuation exceeding $20 billion. Early discussions with potential investors have reportedly attracted strong interest.

Earlier, the company had started talks to raise at least $300 million at a valuation of at least $10 billion. The current discussions indicate a possible increase in valuation expectations.

Fundraising Reflects High Costs of Advanced AI Development

The potential fundraising highlights the significant capital required to develop and operate advanced artificial intelligence models. This includes systems designed for complex reasoning and autonomous agent capabilities.

The report noted that such technological development demands substantial financial investment, reflecting broader trends in the AI sector.

Investment Talks Continue Amid Market and Access Considerations

The discussions remain ongoing, and both the valuation and funding amount could still change.

Previous reporting indicated that some U.S. venture capital firms may be cautious about investing in DeepSeek due to its status as a Chinese startup.

Reuters also reported earlier that DeepSeek did not provide its flagship model to U.S. chipmakers for performance optimization. The company had trained one of its newer models using advanced chips from Nvidia despite restrictions.

DeepSeek’s initial release in January 2025 triggered a global technology stock selloff and prompted Chinese competitors to upgrade their own models. Shares of Alibaba rose 1.3% in premarket trading following the report.

PHOTO: UNSPLASH

This article was created with AI assistance.

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