Beijing, China – DeepSeek, a Chinese artificial intelligence startup, has temporarily halted its second round of funding after comments made by its founder and CEO, Liang Wenfeng, during private meetings with investors sparked widespread controversy and shock on Chinese social media platforms following their leak and widespread dissemination.
Details of the funding round suspension and targeted assessment
According to Bloomberg, Liang verbally informed potential investors that he was temporarily suspending the new funding round.
This round aimed to achieve a massive pre-investment valuation for the company of approximately 480 billion yuan, equivalent to about $71 billion. This sudden decision came after the startup’s founder expressed his deep displeasure over the leak of notes he described as very frank and direct. These notes addressed the company’s unprecedented reliance on Nvidia chips and his personal view that China still lags behind the United States in the field of artificial intelligence development.
First round worth billions of dollars and developments in Nvidia’s chips
It is worth noting that DeepSeek successfully concluded its first funding round last June, raising approximately $7 billion, with the participation of a prominent group of major investors, including the technology giant Tencent, the well-known battery manufacturer CATL, as well as the Chinese National Artificial Intelligence Investment Fund.
That first round gave the company, which is headquartered in the Chinese city of Hangzhou, a valuation ranging between $50 and $52 billion, making it the most valuable emerging artificial intelligence company in the world. In conjunction with these developments, the company is currently working on developing its own artificial intelligence chip, as part of its strategy to gradually reduce its dependence on Nvidia processors, which are already subject to strict US export restrictions and sanctions that limit the ability of Chinese companies to possess the latest advanced processors needed to train major models.
Statements that clash with the official narrative and preparations for public release
These leaked remarks touched on one of the most sensitive issues for Chinese tech companies. Liang’s words, which circulated on Weibo and other social media platforms, revealed him telling investors that China still lags behind Washington technologically and acknowledging that DeepSec relies entirely on Nvidia chips despite sanctions. These leaks have placed the company in the spotlight at a critical juncture, as Beijing seeks to establish an official narrative that its companies are rapidly closing the technological gap with their American counterparts.
Despite the suspension of its current funding round, informed sources confirm that DeepSeek is steadily progressing with its preparations for a stock market listing and is highly likely to file a formal application for an initial public offering (IPO) as early as this year. The Bloomberg Billionaires Index estimates founder Liang Wenfeng’s net worth at approximately $36 billion, making him the world’s richest AI model developer, surpassing prominent figures such as Anthropic co-founder Dario Amode and former OpenAI CEO Greg Brockman.
A different business model and questions of financial sustainability
The company adopts a unique strategy based on low pricing and open-source models, avoiding a focus on quick, short-term returns and profits. This has helped it build a massive developer base, but it has also raised questions about its financial sustainability. The fate of the funding suspension will depend on how quickly the controversy is contained and on investor confidence.
