DeepSeek Pauses Second Funding Round After Founder's Comments Go Viral

DeepSeek, the Chinese artificial intelligence lab that rattled global markets last year with a low-cost model rivaling Western AI systems, has put its second fundraising round on hold, according to people familiar with the matter cited by Bloomberg News.

The company had verbally told some prospective investors that they would not be signing investment agreements in the coming days, despite an earlier expectation that the round would close imminently. DeepSeek had been pursuing at least 10 billion yuan (roughly $1.5 billion) in new funding at a pre-money valuation of about 480 billion yuan (roughly $71 billion) — a valuation that would mark a significant jump from its first outside funding round.

That first round, which closed in June, raised $7 billion from investors including Tencent, battery giant CATL, and a state-backed AI investment fund, and had been read by many in the industry as validation of DeepSeek's position as a genuine Chinese rival to leading U.S. AI labs, following the shockwaves its efficient, low-cost model training approach sent through AI markets in early 2025.

According to the Bloomberg report, the pause stems in part from frustration inside the company over how comments attributed to founder Liang Wenfeng — made privately to investors during the first funding round, discussing China's AI capabilities and its reliance on Nvidia chips — spread online and were amplified far beyond their original context. Liang has kept an unusually low public profile for the founder of one of the world's most closely watched AI companies, rarely giving interviews, which may have amplified scrutiny when private remarks became public.

DeepSeek has not ruled out resuming the funding process at a later date, according to the report, and the pause does not appear to reflect any change in the company's underlying technology roadmap or commercial trajectory.

The episode underscores the delicate position Chinese AI companies occupy as they seek to raise capital on the global stage while navigating both geopolitical sensitivity around semiconductor export controls and intense domestic and international scrutiny of what their leadership says about the U.S.-China AI competition. Comments that might pass as ordinary investor-relations color from a Silicon Valley founder can take on outsized geopolitical significance when made by the head of a company that Washington policymakers have repeatedly cited as evidence that export controls on advanced chips have not stopped China's AI progress.

For DeepSeek's prospective backers, many of whom compete for allocation in a small number of top-tier Chinese AI names, the pause is likely to be read as a temporary hiccup rather than a fundamental setback, given the strength of demand reflected in the round's valuation jump from the June raise. Whether the round resumes at the same terms, or DeepSeek waits for a calmer news cycle, is likely to become clearer in the coming weeks.