DeepSeek closes in on $12B round backed by Tencent and CATL, with up to $15B on the table before 2027 IPO

Bloomberg reported on October 6 that Chinese AI company DeepSeek is closing in on at least 80 billion yuan (about US$12 billion) in a new funding round, well above the roughly 50 billion yuan target the company originally set. Tencent Holdings and battery giant Contemporary Amperex Technology (CATL) are among the largest contributors, and based on signed term sheets the final tally could approach 100 billion yuan (about US$15 billion). The round is positioned as pre-IPO capital ahead of a planned listing on Shanghai's STAR Market in early 2027.

DeepSeek's annualized revenue run rate crossed US$1 billion in September, doubling in a single quarter, driven by strong demand for its low-cost, high-performance models after the V4 Flash release. The new capital will primarily fund compute infrastructure expansion. Bloomberg reports DeepSeek plans to deploy at least 160,000 Huawei Ascend AI accelerators at a new data center under construction in Inner Mongolia, paired with its late-September partnership with Huawei to develop Ascend-optimized programming tools and open-source alternatives to the Nvidia CUDA ecosystem. Reuters reported last month that DeepSeek has retained CITIC Securities to assist with IPO preparations; the timing, valuation and size of any listing remain undetermined.

Bloomberg Intelligence said earlier this week that the gap between leading Chinese and U.S. AI models has narrowed from roughly 9 percent in May to about 3 percent on benchmark scores today, with DeepSeek among the labs driving the gain. DeepSeek was started by High-Flyer quantitative hedge fund founder Liang Wenfeng. The company began raising the latest round in July at a 500 billion yuan (about US$74 billion) target valuation, just one month after closing a roughly US$7.4 billion first external round.