DeepSeek halts fundraising after viral US-China remarks
What's the story
DeepSeek, a leading Chinese AI company, has reportedly put its second fundraising round on hold. The decision comes just days after comments attributed to the company's founder Liang Wenfeng about US-China AI competition went viral. According to Bloomberg, DeepSeek verbally informed some potential investors that they won't be signing investment agreements in the coming days as expected.
Investor impact
Liang's dissatisfaction with online reports about his remarks
The decision to suspend the funding round is partly due to Liang's dissatisfaction with online reports about his remarks to investors during his first financing deal.
That deal, which closed in June and raised $7 billion for DeepSeek, was widely reported on.
Chinese media outlets such as Yicai reported that Liang discussed China's reliance on NVIDIA Corp. chips for AI development and its lag behind the US in AI sophistication during a meeting with unidentified parties.
Strategic moves
Negotiations for funding round still ongoing
Despite the current suspension, negotiations for the funding round are still ongoing and could be resumed later. However, it is unclear if DeepSeek has updated all potential investors about its decision.
The company was looking to raise at least 10 billion yuan in this follow-on deal, with a pre-money valuation of at least 480 billion yuan.
In addition to this, DeepSeek has also started preparing for an initial public offering (IPO) which could be filed as early as this year.