DeepSeek Pauses Funding Round After Viral Founder Comments

DeepSeek, a Chinese artificial intelligence company, has informed prospective investors that it is temporarily suspending its second fundraising round. This decision comes days after comments widely attributed to its founder, Liang Wenfeng, regarding US-Chinese AI competition gained significant traction online. The company verbally communicated to some potential backers that investment agreements would not be finalized as anticipated in the coming days. DeepSeek may consider resuming the fundraising process at a later date, according to sources familiar with the matter who requested anonymity to discuss private deliberations.

The suspension appears to be partly driven by Liang's dissatisfaction with online reports concerning his remarks made to investors during the company's first financing deal. That initial round, which closed in June, successfully raised $7 billion for the AI lab. Bloomberg has not independently verified the authenticity of the viral posts, which reportedly included a transcript from a meeting Liang conducted with undisclosed individuals. Chinese media outlets, including Yicai, reported this week that the billionaire founder discussed the reliance on Nvidia Corp. chips for AI development and China's ongoing deficit in AI sophistication compared to the United States.

DeepSeek has not yet responded to an emailed request for comment regarding the transcript or the fundraising pause. Negotiations are described as fluid, and the company might still decide to proceed with the deal. It remains unclear whether DeepSeek has informed all potential investors in the current round of its intentions. The current funding talks commenced only weeks after DeepSeek concluded its record-breaking first financing round, which attracted prominent investors such as Tencent Holdings Ltd. and Contemporary Amperex Technology Co. Ltd.

Prior to the suspension, DeepSeek was reportedly aiming to secure at least 10 billion yuan in additional funds through this follow-on deal, with the final amount potentially increasing based on investor participation. The startup had been targeting a pre-money valuation of at least 480 billion yuan, according to Bloomberg's previous reporting.