DeepSeek, the Chinese artificial intelligence startup that startled Silicon Valley last year by building a frontier-class model at a fraction of the expected cost, has raised $15 billion in its second private funding round — nearly double its original target — as it accelerates plans to list in Shanghai early next year.
The round, which ran from July through this month, drew in both existing shareholders and new heavyweight backers, according to people familiar with the matter. Battery giant Contemporary Amperex Technology (CATL) and tech group Tencent, both previous investors, put in more money, alongside existing shareholders Monolith Management and Shixiang. New participants include semiconductor-focused private equity firm Stony Creek Capital, Legend Capital and carmaker Geely. Before the round closed, DeepSeek was valued at roughly $74 billion.
The company is now moving quickly toward public markets. It has hired state-owned investment bank Citic Securities to advise on the listing and recruited former venture capitalist Yan Wentao as chief financial officer in September. If the timetable holds, DeepSeek could reach the stock market ahead of OpenAI — a striking prospect for a lab that, less than two years ago, was known mainly to researchers.
DeepSeek’s appeal to investors rests on an unusual combination: competitive models and, by the standards of the industry, striking efficiency. Founder Liang Wenfeng told investors in September that the company’s annualised revenue run rate had reached $1 billion, more than double the $400 million to $500 million reported in July. The money comes mainly from cloud-based access to its models through APIs. The company has reportedly maintained gross margins of 70% to 80% on access to its V4 flagship model despite charging less than US rivals, and in August it introduced peak-hour pricing that raised rates for its flagship models roughly fourfold at busy times — still below major competitors’ prices.
The raise also lands at a moment when investors globally are asking harder questions about AI economics. On the same day DeepSeek’s round was reported, US tech shares were sliding precisely because of anxiety over whether heavy AI infrastructure spending will generate adequate returns. DeepSeek’s pitch to investors is, in effect, the opposite one: comparable capability without the comparable bill. Annualised revenue is not profit, however, and the company continues to invest heavily in computing power — the new capital is expected to fund model research and infrastructure as it prepares its restructuring for the listing.
The deal is the largest primary-market financing in China this year and underlines how much of the AI race is now being funded and fought outside the United States. Rival Chinese lab Moonshot AI is also reported to be approaching a stock market debut. For Washington, which has tried to slow China’s AI progress by restricting exports of advanced chips, DeepSeek’s trajectory — efficient models, a $74 billion pre-IPO valuation and a domestic listing — is an uncomfortable counterpoint.
Sources:
The Wall Street Journal via Morningstar — https://www.morningstar.com/news/dow-jones/202610223804/chinese-ai-startup-deekseek-raised-15-billion-ahead-of-potential-ipo
PYMNTS — https://www.pymnts.com/news/artificial-intelligence/2026/deepseek-raises-15-billion-ahead-of-planned-shanghai-ipo
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