DeepSeek’s funding pause has thrown a wrench into what was shaping up to be one of the largest private financing rounds in Chinese tech history. The Hangzhou-based AI startup has told prospective backers that its second fundraising round is on hold, according to people familiar with the matter cited by News. Investors who expected to sign agreements within days were instead told to stand down — for now.
DeepSeek Pauses Second Funding Round Amid Investor Talks
The DeepSeek funding pause was communicated verbally, not through any formal filing. Backers were informed they would not be signing investment agreements in the coming days as previously expected, Bloomberg reported Saturday.
Reuters said it could not independently verify the report, and DeepSeek could not be reached for comment outside regular business hours. Still, multiple outlets citing the same sourcing chain point to the same conclusion: the deal is frozen, not dead.
- Deal status: suspended, not cancelled
- Communication: verbal, to select prospective investors
- Timeline: pause disclosed within the last 24 hours as of this report
What Triggered the Funding Pause
The suspension appears tied less to market conditions and more to founder frustration. Liang Wenfeng, DeepSeek’s founder, reportedly grew irritated over online reports describing comments he made to investors during the company’s first fundraising round.
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Chinese outlet Yicai this week published details from what it described as investor meeting notes, touching on Liang’s views of the US-China AI gap. Bloomberg has not verified the authenticity of those posts, but the timing lines up closely with the pause.
Inside DeepSeek’s $74 Billion Fundraising Push
Before the pause, DeepSeek was targeting a valuation of roughly 500 billion yuan — about $74 billion — for its second round. That would mark a massive jump from its debut raise, which pulled in approximately $7.4 billion and set a record for first-time financing by a Chinese tech startup.
The new capital was meant to fund an aggressive expansion, particularly around computing capacity, as DeepSeek competes for scarce AI infrastructure alongside global labs racing to secure data-center access.
| Detail | Figure |
|---|---|
| First round raised | ~$7.4 billion |
| Target valuation, round two | ~$74 billion (500B yuan) |
| Founder | Liang Wenfeng |
| Parent company | High-Flyer Capital Management |
| Founded | 2023 |
Liang Wenfeng’s Viral Comments and the Fallout
According to the unconfirmed transcript circulating this week, Liang discussed China’s reliance on Nvidia chips and the country’s persistent lag behind US AI labs. He reportedly estimated DeepSeek remains 12 to 18 months behind leading American firms — despite operating on roughly one-twentieth of their computing resources.
That kind of candor, even filtered through secondhand reporting, doesn’t sit well with a founder managing a live fundraising process. Investors weighing a $74 billion bet don’t want their target’s leadership fielding unplanned scrutiny over leaked remarks.
Who Was Lining Up to Invest
DeepSeek’s first round already drew heavyweight backing, including Tencent, battery giant CATL, and the National Artificial Intelligence Industry Investment Fund — one of Beijing’s key vehicles for steering AI-sector capital.
For the second round, interest reportedly extended further into state territory:
- China Investment Corp
- The National Social Security Fund
IPO Plans and the Bigger Financial Picture
The funding pause doesn’t appear to be the whole story. DeepSeek is reportedly laying groundwork for an IPO that could be filed later this year, a move that would give it another capital channel entirely separate from private fundraising.
Executives at DeepSeek and High-Flyer have also discussed pivoting toward a business model that actually generates revenue and, eventually, profit — a shift from the company’s research-first posture since its breakout model launch last year stunned the AI industry with its efficiency.
Expert and Market Reaction
Analysts tracking China’s AI sector see the pause as more about optics than fundamentals. DeepSeek’s technology hasn’t lost credibility — its 2025 model proved Chinese firms could compete with Silicon Valley despite US export restrictions on advanced chips.
What’s shifted is founder visibility. Liang’s net worth reportedly more than doubled after the first round, making him the world’s richest AI-model creator by some estimates. That kind of profile draws exactly the sort of media attention he now appears to be recoiling from.
What This Means for China’s AI Race
DeepSeek sits at the center of Beijing’s ambitions to compete globally in artificial intelligence, and a stumble in its fundraising — even a temporary one — carries symbolic weight beyond the company itself.
Negotiations remain fluid, according to Bloomberg’s sourcing, and DeepSeek may still choose to proceed with some or all of the original investors once the current storm passes. For now, though, the message to backers is simple: wait.
- Pause is described as reversible by sources
- IPO track continues regardless of private funding status
- State fund interest suggests political backing remains intact
