DeepSeek, the Chinese AI lab behind the open-weight R1 and V4 models, has restarted talks for a second funding round targeting roughly 50 billion yuan (~$7 billion) at a pre-money valuation of about 500 billion yuan (~$70 billion) — up 43% from its first round two months ago. If it closes, DeepSeek will have raised over $14 billion in under five months. This piece covers the timeline, the numbers, the odd cap table, peer comparisons, and what remains unconfirmed.
Timeline: From "No Fundraising" to a $70 Billion Valuation in Four Months
- April 2026: A corporate filing shows DeepSeek increased its registered capital and founder Liang Wenfeng personally subscribed to the new shares, raising his direct stake from 1% to 34%. Combined with an entity he controls, his total control over the operating company reached roughly 84.29% — the ownership structure that would later shape how outside capital entered the company. That same month, DeepSeek opened its first-ever external funding round and previewed its V4 model series.
- June 2026: The first round closed at roughly 50 billion yuan (~$7.4 billion), giving DeepSeek a post-money valuation of more than 350 billion yuan (reported in a range of $52–59 billion across sources) — the largest first-round raise in Chinese AI history. Liang personally contributed 20 billion yuan; Tencent put in 10 billion yuan, CATL 5 billion yuan, with JD.com, NetEase, IDG Capital and China's National AI Industry Investment Fund also participating.
- July 14–17, 2026: Multiple outlets reported DeepSeek had begun preparing a STAR Market (Shanghai) IPO and was simultaneously in talks for a second round at a pre-money valuation of roughly $71 billion (~480 billion yuan) — about 37% above the first round's post-money value. This is also when DeepSeek's annualized revenue (ARR) — reportedly $400–500 million, mostly from API token usage — became public for the first time.
- July 25–26, 2026: The second-round talks abruptly paused. According to Bloomberg and other outlets, part of the reason was that founder Liang Wenfeng was unhappy that comments he made during closed-door investor meetings had circulated online; DeepSeek reportedly told some investors on the standby list to hold off on signing.
- August 4–5, 2026: Dealmakers cited by Chinese business magazine Caijing said the round had restarted, still targeting 50 billion yuan at a pre-money valuation of roughly 500 billion yuan (~$70 billion), with signing expected in late August. Both DeepSeek and the investors reportedly want to keep this round low-profile.
Caveat: every figure above about the second round — the amount, the valuation, the timeline — comes from anonymous dealmakers cited by Chinese financial media, not from an official DeepSeek statement. Terms could still shift before signing.
The Numbers at a Glance
| Round 1 (closed) | Round 2 (in talks) | |
|---|---|---|
| Talks opened | April 2026 | Restarted mid-July, paused, restarted again Aug 4–5 |
| Expected/actual close | June 2026 | Late August 2026 (planned) |
| Amount raised | ~50B yuan (~$7.4B) | Target ~50B yuan (~$7B) |
| Valuation basis | Post-money >350B yuan | Pre-money ~500B yuan (~$70B) |
| Valuation increase | — | ~+43% vs. Round 1 |
| Key backers | National AI Industry Investment Fund, Tencent (10B yuan), CATL (5B yuan), JD.com, NetEase, IDG Capital, Loyal Valley Capital, Shixiang Capital | Round-1 runner-up investors + some existing backers increasing stakes |
| Combined total if Round 2 closes | — | Over 100B yuan (~$14B) in under 5 months |
| Metric | Value | Note |
|---|---|---|
| Annualized revenue (ARR) | ~$400–500 million | Mostly API token usage; sourced from media reports, not an official disclosure |
| Gross margin | Reportedly >50% | Unverified by independent audit |
| Implied price-to-sales (P/S) ratio | ~140–150x | Vs. OpenAI's ~65x and Anthropic's ~21x, per dealmaker estimates |
| Monthly active users | 100M+ (externally reported) | Methodology undisclosed |
Inside the Deal: Why the Math — and the Voting Rights — Don't Add Up Cleanly
The real bill is compute, not headlines. Shortly after closing its first round, DeepSeek said it would double headcount across data-center and AI-agent teams, and Reuters reported it was hiring chip-design engineers to develop its own AI inference chips. Industry analysts estimate that for every 10 billion yuan DeepSeek raises, roughly 7 billion yuan goes straight into compute-related spending — chips, data centers, bandwidth, liquid cooling. The fundraising cadence isn't really about valuation bragging rights; it's a race to keep pace with its own compute buildout.
Most investors don't get a vote. In the first round, most outside capital flowed in through a limited partnership controlled by Liang Wenfeng, meaning those investors received no voting rights and are locked in for five years. The one exception: China's National AI Industry Investment Fund, which invested directly and got both voting rights and no lock-up. This structure keeps Liang's control near 84% — and it's exactly the kind of detail that has drawn scrutiny from outlets like Forbes, which flagged concerns about DeepSeek's alignment with the Chinese state given its unusual cap table, even as the company serves a global user base.
A 148x price-to-sales ratio is either a bet on the future — or a red flag. At a $70 billion pre-money valuation against $400–500 million in ARR, DeepSeek's implied P/S ratio sits around 140–150x, dwarfing OpenAI's ~65x and Anthropic's ~21x. One dealmaker's assessment, translated from Chinese coverage, is blunt: "Pricing a foundation-model company is fundamentally an options bet, not a cash-flow valuation." Investors aren't pricing today's revenue — they're pricing the chance that DeepSeek becomes infrastructure-level in China's compute ecosystem and enterprise agent market.
How DeepSeek Stacks Up Against Moonshot, Zhipu, MiniMax — and OpenAI/Anthropic
| Company | Listing status | Latest valuation/market cap | Reported ARR | Recent funding pace |
|---|---|---|---|---|
| DeepSeek | Private, preparing STAR Market IPO | ~500B yuan pre-money (~$70B, in talks) | ~$400–500M | 2 rounds in 4 months, targeting >$14B combined |
| Moonshot AI (Kimi) | Private | ~$20B (May 2026); reportedly seeking $30B in later talks | ~$200M | 4 rounds in 6 months, ~$3.9B total |
| Zhipu AI (Z.ai) | Listed (Hong Kong) | ~350B yuan market cap (May 2026) | Undisclosed | ~8.3B yuan raised pre-IPO |
| MiniMax | Listed (Hong Kong) | ~210B yuan market cap (May 2026) | Undisclosed | ~11B yuan raised pre-IPO |
The pattern: DeepSeek and Moonshot — the two still-private frontrunners — both carry P/S multiples around 140–150x, well above what the already-listed Zhipu and MiniMax trade at in the secondary market. Private-market investors are, for now, paying a steeper premium for the two labs that haven't yet faced public-market scrutiny. For the model-side cadence, see our DeepSeek V4 Flash benchmark and pricing breakdown and Qwen3.8-Max launch notes.
The Controversy: A Leaked Transcript, an Unhappy Founder, and Bubble Warnings
- A leaked closed-door transcript stalled the deal. The immediate trigger for the July pause was reportedly Liang Wenfeng's frustration that remarks he made during first-round investor meetings had spread online — a reminder that as DeepSeek's investor base grows, keeping a low profile is getting harder.
- The voting-rights structure is drawing outside scrutiny. Most external investors have no vote and a five-year lock-up, while only the state-backed National AI Industry Investment Fund gets direct voting rights with no lock-up. This is unverified beyond what's been reported by outlets like Forbes and CIW, and DeepSeek hasn't publicly addressed the governance questions this raises about state influence versus founder control.
- The valuation-to-revenue gap remains unresolved. A 140–150x P/S ratio is extreme by any industry's standard — even top-tier, high-growth SaaS companies typically trade at 30–50x. Whether this valuation holds up depends on whether DeepSeek can convert its technical lead into scaled enterprise revenue after a STAR Market listing — something the market hasn't yet tested, and a live example of the broader "AI valuation bubble" debate playing out in real time.
To be clear: every detail above about deal size, valuation, and ownership structure comes from anonymous-sourced reporting (Caijing, Reuters, Bloomberg, Forbes, among others). DeepSeek has not officially confirmed the terms of its second round, so treat the specific numbers as reported-but-unconfirmed until a formal announcement.
Why It Matters: STAR Market Rule Changes, China's Compute Push, and the Global AI Funding Race
- China just rewrote its listing rules for unprofitable AI companies. On June 17, 2026, the Shanghai Stock Exchange announced at the Lujiazui Forum that it was expanding its "fifth listing standard" on the STAR Market to cover AI companies — meaning a company doesn't need to be profitable, or even have significant revenue, to file, as long as its technology is strong enough. That rule change is the regulatory backdrop making DeepSeek's planned late-2026 IPO filing (targeting a 2027 listing) plausible in the first place.
- DeepSeek just abandoned a five-year "no fundraising, no IPO, no commercialization" policy. For years, DeepSeek was funded entirely by founder Liang Wenfeng's quant fund, High-Flyer, and refused outside capital. That policy ended with the first round in June 2026 — a symbolic moment for China's AI sector broadly, as rivals Zhipu and MiniMax have already listed in Hong Kong and Moonshot keeps raising at an accelerating pace.
- This is part of a global re-pricing of frontier AI labs. OpenAI was reportedly valued at $300 billion in 2025, and Anthropic's valuation reportedly surpassed OpenAI's by June 2026. Seen against that backdrop, investors paying a steep premium for a globally competitive Chinese lab is, in part, a bet that Chinese model companies can keep pace technically while serving a market as large as any economy's.
- Compute self-reliance is the subtext. Reports that DeepSeek is developing its own AI inference chips and building out its own data centers mirror a broader trend among leading Chinese AI labs to pair frontier model development with domestic compute and chip strategies — which also explains why a company with comparatively modest revenue still needs to raise capital this fast and this often.
Citable Figures and Sources
- Round-2 talks: Target raise ~50B yuan, pre-money ~500B yuan (~$70B), signing planned for late August 2026 (Caijing via multiple dealmakers; relayed by Sina Finance and others).
- Round 1 closed: ~50B yuan (~$7.4B) at post-money >350B yuan (range reported across financial and international outlets).
- Revenue and multiples: ARR ~$400–500M; implied Round-2 P/S ~140–150x vs. OpenAI ~65x and Anthropic ~21x (dealmaker estimates, not official disclosures).
- Cap table: Liang's control ~84%; most outside capital via founder-controlled LP with no vote and a five-year lock-up; National AI Industry Investment Fund as the exception (media reporting).
Verifiable third-party and technical sources below. Treat deal figures as reported-but-unconfirmed until a formal announcement:
Sina Finance relay of Caijing: DeepSeek restarts second round at ~500B yuan pre-money
Gate News: DeepSeek reopens second funding round
DeepSeek official API documentation
Hugging Face DeepSeek model cards (V4 technical background)
FAQ
Has DeepSeek's second funding round actually closed?
Not yet. As of this writing, the round is still in negotiation, targeting a close by late August 2026. The final amount and terms could differ from what's currently being reported.
Why is DeepSeek raising money again so soon after its first round?
The company is funding a rapid buildout of data centers, in-house AI chips, and headcount across its agent and infrastructure teams — capital expenditure that's outpacing what its first raise covered, according to multiple reports.
Is the $70 billion valuation confirmed?
No. It comes from dealmakers cited anonymously by Chinese financial media (primarily Caijing), not from an official DeepSeek statement, and it could change before any agreement is signed.
Does this valuation mean DeepSeek's investors get more control over the company?
Not necessarily — and that's part of the controversy. In the first round, most outside investors received no voting rights and a five-year lock-up, while only China's National AI Industry Investment Fund got direct voting rights, which has raised governance and state-influence questions that remain unresolved.
When might DeepSeek go public, and can international investors buy in?
DeepSeek is reportedly preparing to file for a STAR Market listing in Shanghai by the end of 2026, targeting a 2027 debut. The STAR Market is a mainland China exchange, so retail access for international investors would likely be indirect (e.g., through connect programs) rather than direct participation in this private round, which is currently limited to institutional backers.
DeepSeek's second round puts the compute-buildout vs. fundraising cadence in plain view: even with strong model-side price/performance (see our V4 Flash benchmarks and pricing breakdown), teams still need dedicated environments to validate local agents, toolchains, and harness choices. Shared GPU clusters are often hard to reset cleanly. A dedicated Apple Silicon machine you can reimage on demand is usually more controllable. VMSPIN day-rate cloud Mac mini ships with MDM auto-provisioning plus SSH and VNC access — useful for short benchmarks and multi-stack comparisons. Pair that with our Mac mini M4 rental guide and the pricing page when you model holding cost.