Pomegra
DeepSeek is close to raising at least 80 billion yuan (about $12 billion) from Tencent, CATL and state-linked funds, months after its first outside round and ahead of a planned 2027 IPO.
Key Takeaways
- DeepSeek is nearing a raise of at least 80 billion yuan (about $12B), with Tencent and CATL among the largest backers.
- Signed term sheets could lift the total toward 100 billion yuan. The target was originally about 50 billion yuan.
- A STAR Market listing is being prepared with CITIC Securities, with a debut targeted for early 2027.
Lead
DeepSeek, the Hangzhou-based AI lab behind the open-weight R1 and V4 model families, is close to closing a funding round of at least 80 billion yuan, or about $12 billion, as of October 6, 2026. Tencent and battery maker CATL have committed some of the largest sums. Signed term sheets suggest the final figure could approach 100 billion yuan. The company had first set out to raise about 50 billion yuan, then found demand well above that.
How Large Is This Round Compared With the Last One?
The new round is roughly 60 percent larger than the first, at the minimum figure. DeepSeek's first outside raise earlier in 2026 totaled about 50 billion yuan (roughly $7.4 billion) at a valuation of $50 billion or more, with some outlets citing a range of $52 billion to $59 billion. Founder Liang Wenfeng put in about 20 billion yuan of that round himself. Tencent contributed about 10 billion yuan and CATL about 5 billion yuan, alongside JD.com, NetEase and China's national AI investment fund.
Valuation for the current round has not been confirmed. One report puts it near $75 billion. If that holds, the company's price rose by roughly half within months, which is a steep step for a lab that took no outside money until this year.
Who Is Investing, and Who Is Being Turned Away?
Investors are mostly government and corporate capital. The company has fielded strong interest from state-backed funds, investment arms of listed Chinese companies and venture capital firms. It is screening prospective backers closely and has turned away private funds raised from individual investors.
That selectivity fits a pre-IPO cap table. A shareholder base of state vehicles and strategic corporations is easier to manage under STAR Market rules than one full of retail-sourced capital. It also keeps Liang's control intact, since DeepSeek grew out of the quantitative hedge fund High-Flyer and has no history of venture-style governance.
Why Are Tencent and CATL Betting on DeepSeek?
Both have strategic reasons beyond financial return. Tencent, which runs WeChat and a large cloud business, needs a close tie to a leading domestic model developer to keep pace with rivals that have their own in-house or affiliated labs. A larger stake gives it preferred access to DeepSeek's models inside its products and cloud.
CATL is a less obvious name. The company is developing solid-state batteries and has industrial uses for AI in materials research and manufacturing. Its participation also signals that Chinese industrial groups now treat frontier model access as supply-chain infrastructure.
What Is the Money For?
Capital intensity is the central issue. DeepSeek's V4-Flash and V4-Pro models, released as previews in April, are described as matching leading U.S. models at roughly 60 percent lower cost. Staying at that level requires compute. The company is reported to be building a data center with at least 160,000 AI chips from Huawei and developing its own inference chip to reduce reliance on both Nvidia and Huawei.
An 80 billion yuan raise buys a substantial amount of hardware, but not an unlimited amount. Frontier labs in the U.S. have raised far larger sums, so DeepSeek's cost-efficiency advantage has to persist for this capital to stretch.
What Comes Next for the IPO?
The listing path runs through Shanghai. DeepSeek has hired CITIC Securities to prepare an IPO on the technology-focused STAR Market, targeting early 2027. Timing, valuation and size of the offering have not been set, and the company is expected to restructure once the current round closes.
The main risk is execution. Final allocations and the closing valuation are not public, and a flotation depends on regulatory approval and market conditions. A company that has built its reputation on open weights will also have to explain to public investors how it earns revenue from them.
Outlook
DeepSeek is converting a second raise into a pre-IPO financing, with strategic corporate investors in the largest seats and retail-sourced money kept out. The round's headline figure has already grown from 50 billion yuan to at least 80 billion yuan, and could reach 100 billion yuan. The next markers are the confirmed valuation, the final investor list and the filing timeline for a STAR Market debut in early 2027.
