Chinese AI lab DeepSeek has closed its first external funding round of over 500 billion yuan (about $7.4 billion), pushing its valuation past $50 billion. But the deal comes with an unusual structure: outside investors aren't buying shares in DeepSeek directly. Instead, they're putting money into a limited partnership managed by CEO Liang Wenfeng, ensuring he retains absolute control of the company. All investors except a state-backed fund face a five-year lockup period during which they can't sell or transfer their stakes.
The funding sources are a who's who of Chinese tech and finance. Liang personally contributed 20 billion yuan ($2.9 billion), Tencent put in 10 billion yuan ($1.4 billion), battery giant CATL invested 5 billion yuan ($740 million), and JD.com, NetEase, and IDG Capital each chipped in 3 billion yuan ($440 million). The one outlier is the China National AI Industry Fund, which invested 10 billion yuan directly into DeepSeek. That fund gets voting rights and is exempt from the five-year lockup. All other external investors have no voting rights—they only receive limited financial information and get preemptive rights to future rounds.
The round marks a major shift for DeepSeek. Since its founding in 2023 as an AI team within quantitative hedge fund High-Flyer, the lab has been self-funded, operating without the pressure to commercialize and maintaining research independence. But with mounting costs for compute and talent, Liang and his team launched the fundraise in April. They conducted rigorous due diligence on limited partners behind their investors to prevent unknown parties from gaining exposure.