Story
DeepSeek Halts Major Fundraising Round After Founder's Leaked Comments
Summary
The Chinese AI giant has reportedly suspended its second major funding round, which targeted a $71 billion valuation, after founder Liang Wenfeng's candid remarks about China's AI lagging the U.S. went viral.
Chinese artificial intelligence firm DeepSeek has abruptly suspended a major fundraising round after candid comments from its founder were leaked and spread widely online, according to a report from Bloomberg. The halt pauses a funding effort that was targeting a pre-money valuation of $71 billion (480 billion yuan).
Founder's 'Reality Check' Goes Viral
The suspension follows remarks reportedly made by billionaire founder Liang Wenfeng during private meetings with investors. According to the report, Liang stated that China still lags behind the United States in AI sophistication and that DeepSeek remains heavily dependent on chips from Nvidia, despite U.S. export controls.
Those comments were subsequently leaked and went viral on Chinese social media and in local media outlets such as Yicai. In response, Bloomberg reports that Liang verbally instructed prospective investors to pause the process, stating that investment agreements would not be signed in the coming days.
Financial Implications
The move puts a sudden stop to what was set to be the company's second massive capital injection this year. Key details of the funding rounds include:
Ad- Paused Round: Targeted a $71 billion pre-money valuation.
- Previous Round: DeepSeek had just closed its initial $7 billion mega-round in June, with backing from high-profile investors including Tencent and battery giant CATL.
Geopolitical Context
Liang's assessment strikes a sensitive nerve, directly challenging the prevailing narrative promoted by Beijing that China's domestic AI industry is on par with or surpassing its counterparts in Silicon Valley. The admission of dependence on U.S.-designed Nvidia chips also highlights the ongoing impact of export controls aimed at curbing China's technological advancement.
While the fundraising is currently on hold, the report from Bloomberg suggests the situation remains fluid. DeepSeek could potentially revive the deal once the public attention from the leaked comments subsides.
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