DeepSeek raises US$15bil to challenge US AI leaders

DeepSeek, a Chinese AI startup, has secured approximately $15 billion in its latest fundraising round, marking one of the largest ever in the country and signaling the company's ambitions to compete globally with industry leaders such as Anthropic PBC and OpenAI. Based in Hangzhou, DeepSeek increased its financing target multiple times, starting from ¥50 billion and reaching the final amount of ¥80 billion.

Major investors in the round included battery giant Contemporary Amperex Technology Co Ltd (CATL) and WeChat operator Tencent Holdings Ltd.

DeepSeek's significant funding position the company for one of the most anticipated IPOs in Chinese markets in years. In 2025, the AI startup stunned global markets by demonstrating the ability to compete with Silicon Valley's leaders at a fraction of the cost, causing a US$1 trillion market meltdown. However, DeepSeek still lags behind US AI leaders like Anthropic and OpenAI in terms of financial resources, having raised less than $100 billion.

The company is preparing for an initial public offering, a milestone event for Chinese markets. DeepSeek has been actively investing in AI data centers and developing more open-source models for use in China and abroad. The firm has gained customers in the US and overseas markets with its high-performance, low-cost models, which have put pressure on domestic competitors and earned it a reputation for innovation.

In September, DeepSeek released V4.1 Flash, triggering a drop in share prices of local rivals MiniMax Group Inc and Z.AI Co. The company's representatives did not respond to requests for comment, but the broader AI landscape shows a trend of companies from Alibaba Group Holding Ltd to ByteDance Ltd introducing low-cost AI services, often open-sourced for customer modifications.

One benchmark chart from Artificial Analysis, dubbed the "DeepSeek death zone," highlights the challenges competitors face in either matching DeepSeek's performance or pricing lower.