DeepSeek Halts $71 Billion Fundraise After Founder's Leaked Comments on Nvidia Dependence

DeepSeek has suspended its second fundraising round after candid remarks from founder Liang Wenfeng about the company's dependence on Nvidia chips and China's lagging AI capabilities were leaked and went viral on Chinese social media. Liang verbally instructed prospective backers to hold off on the round, Bloomberg reported on Friday.

The round had been targeting a pre-money valuation of roughly 480 billion yuan, equivalent to about $71 billion. The pause came just weeks after DeepSeek closed its first funding round in June, which raised approximately $7 billion from investors including Tencent, battery giant CATL, and China's National AI Industry Investment Fund at a valuation between $50 billion and $52 billion. This made DeepSeek one of the most valuable AI companies in the world.

Leaked Remarks Expose Strategic Tensions

Liang's comments touched on sensitive ground for a Chinese AI company operating under US export restrictions. He reportedly told investors that China remains behind the United States in AI capability and that DeepSeek still depends heavily on Nvidia's hardware despite the export controls. The remarks, once made public, drew widespread attention on Weibo and other platforms, putting the company in an uncomfortable spotlight at a time when Beijing promotes the narrative that Chinese AI firms are rapidly closing the gap with their American rivals.

• DeepSeek is designing its own AI chip to reduce reliance on Nvidia hardware, which is subject to US export restrictions that have limited Chinese access to the most advanced processors.
• Liang Wenfeng, whose net worth Bloomberg estimates at $36 billion, is the wealthiest AI model creator globally, ranking above Anthropic's Dario Amodei and former OpenAI president Greg Brockman.
• The company is owned by Zhejiang High-Flyer Asset Management, the hedge fund Liang founded before pivoting to AI research.
• DeepSeek prioritizes aggressive pricing and open-source development over short-term revenue, a strategy that has won a large developer following but raises questions about financial sustainability.

IPO Plans and Open Source Economics

Despite the funding pause, DeepSeek appears to be preparing for a public listing and may file for an initial public offering as soon as this year, according to people familiar with the matter. Liang has pledged to continue developing open-source AI models, a commitment that differentiates DeepSeek from most Western competitors but complicates the economics of raising capital at a $71 billion valuation.

The incident highlights the delicate balance Chinese AI firms must strike between national pride, geopolitical restrictions, and investor confidence. The coming weeks will test whether DeepSeek can maintain its valuation momentum while navigating the fallout from the leak. For investors, the episode underscores the risks of backing a company whose founder is as candid about geopolitical realities as he is committed to open-source ideals. Whether the funding pause is a brief interruption or a sign of deeper tension between DeepSeek's research ambitions and investor expectations will depend on how quickly the controversy fades.