DeepSeek’s R1 open source LLM has pushed the Chinese AI startup towards a potential $45 billion valuation, as state-backed investors and Tencent bet on open-source AI to challenge OpenAI and Anthropic.
DeepSeek is in talks to raise fresh funding at a potential valuation of around $45 billion, highlighting how open-source AI models are rapidly emerging as credible challengers to proprietary systems from companies such as OpenAI and Anthropic.
The sharp jump from DeepSeek’s earlier estimated valuation of roughly $20 billion has been largely driven by growing investor confidence in the company’s R1 open-source large language model, which gained significant attention earlier this year. Despite operating with comparatively lower compute resources, DeepSeek has positioned itself among the leading frontier AI developers globally.
China’s state-backed China Integrated Circuit Industry Investment Fund, commonly known as Big Fund, is expected to lead the funding round in what would mark its first known investment in a large language model developer. Tencent and Flounder are also reportedly in discussions to invest, although the final investor lineup has not yet been confirmed.
The potential investment reflects Beijing’s broader push for AI and semiconductor self-reliance, while also signalling stronger integration between China’s domestic chip ecosystem and open-source AI model builders. DeepSeek is optimising its models to run on Chinese hardware platforms such as Huawei’s Ascend chips, reducing dependence on US technology stacks.
Led by billionaire founder Liang Wenfeng, DeepSeek has focused heavily on frontier AI model development over aggressive commercialisation as China’s AI race intensifies.
