DeepSeek wants to raise its first round of financing and copies the last thing that remained to be copied from the US: the economic model

Chinese AI startups appear to have surrendered to Silicon Valley capitalism. Both DeepSeek such as Moonshot AI (Kimi) have begun to raise investment rounds or are preparing to do so. It is a turning point in a race that is now becoming especially interesting and that also raises a clear question: will these companies continue betting on open models?

The valuation is multiplied by two. DeepSeek had always avoided making that decision and it seemed almost a personal project of its founder, billionaire Liang Wenfeng. However, the company is now in talks to raise its first round of external investment, they assure in Financial Times. According to company data, Wenfeng has 89.5% of the stake in the company. There is talk of a round that would increase DeepSeek’s valuation from the current $20 billion to around $45 billion.

Who is the “Big Fund”. Behind this investment round is above all the China Integrated Circuit Industry Investment Fund, also known as the “Big Fund”. This consortium, the most important of its segment in the field of semiconductors, is supported by the Chinese state, and has a “cash” of 47 billion dollars contributed by the Chinese Ministry of Economy, the local government and several state banks thanks to a third round that was carried out in 2024. At the moment the “Big Fund” has not invested in other Chinese AI startups, but it has in companies like SMIC or Yangtze.

The war for talent. The reason behind this decision is not only the need for capital to have access to more computing capacity. According to sources close to the operation, Liang Wenfeng has been forced to open that option to stop talent theft and thus be able to keep their best researchers on the payroll. In a market as competitive as this one, DeepSeek needs to offer shares to its employees to compete with the aggressive recruitment of talent by its local and Western rivals.

A promising pairing. The relevance of this investment goes beyond the AI ​​model as such. DeepSeek has been significantly optimized for be able to run on Huawei hardwareallowing China to have a platform that works without the need for Nvidia chips. This symbiosis between this efficient AI model and the Chinese hardware giant is quite a bet by the Chinese government to try to win this race despite Washington’s blockades.

The forced bet on “national” chips. Seeking that support in Huawei chips is not only a technical choice, but a political necessity for survive NVIDIA GPU crash. The problem is that Chinese hardware is still struggling to close the raw performance gap against architectures like Blackwell’s. If DeepSeek’s software hits a ceiling and chips created in China do not evolve at the necessary pace, the laboratory could find itself trapped: it would not matter to be very efficient when they cannot compete in raw power.

Moonshot signs up for the rounds. DeepSeek is not alone in this race to achieve huge valuations. Moonshot AI just got up 2 billion dollars from investors such as Meituan, raising its value above 20 billion. Meanwhile, other rivals such as MiniMax and Zhipu AI (GLM) already surpass the 30,000 million valuation in their stock market debuts. This trend is therefore following what was already experienced (and continues to be experienced) in the US with AI startups, and the capital bubble that exists in the North American country now seems to have its eastern version in China. Moonshot AI and exceeds $200 million in annual recurring revenue (ARR).

The paradox of copying the economic model. It’s ironic that DeepSeek, which became famous for challenging the “brute force” of American spending, ends up adopting its same funding structure. The company has shown that efficiency could offer an alternative to those almost unlimited resources of venture capital accessed by OpenAI or Anthropic. However, market reality dictates that a very solid capital structure is still what is needed to survive in the long term. Either you have it, or you can’t continue training models, reserving computing capacity and, of course, retaining talent.

Open models? Until now DeepSeek had been one of the heroes of open weight AI models. Thanks to this, platforms like Hugging Face allow you to download it and allow everyone to take advantage of its achievements in terms of efficiency. The entry of venture capital and state funds could change the rules of the game: investors do not usually inject billions of dollars so that the product ends up being “given away” even for its competitors. The company will probably face the dilemma of closing its next models to protect its valuation and generate exclusive income, or keep its philosophy open at the risk that its investors no longer trust that strategy.

In Xataka | If at some point NVIDIA has to choose between giving its best chips to the US or China, its choice is very clear.