Tencent, Alibaba race to invest in DeepSeek as Chinese AI startup valuation jumps past $20 billion: Report

DeepSeek, the Chinese artificial intelligence lab that drew global attention earlier this year, is now reportedly in discussions for its first external funding round at a valuation exceeding $20 billion. The sharp rise in investor interest highlights how quickly the company has become one of the most closely watched names in the global AI race.

According to a Reuters report cited by multiple outlets, major Chinese technology groups including Tencent Holdings and Alibaba Group are exploring investments in DeepSeek as competition intensifies around next generation AI models.

The latest talks suggest DeepSeek’s targeted valuation has climbed dramatically in a short period of time. Earlier this week, reports indicated the company was seeking to raise at least $300 million at a minimum valuation of $10 billion.

That figure has now reportedly surged beyond $20 billion after strong investor demand. Sources familiar with the discussions said interest in the company accelerated within 48 hours, pushing expectations sharply higher.

No final agreement has been announced, and the eventual size, pricing, and structure of any fundraising round could still change.

Among the companies linked to the talks, Tencent is said to have proposed acquiring as much as a 20 percent stake in DeepSeek. However, the startup reportedly does not want to surrender that level of ownership or control during its first outside funding round.

Alibaba is also said to be in active negotiations, although details regarding its possible investment size or terms have not been publicly disclosed.

Neither DeepSeek, Tencent, nor Alibaba has publicly confirmed the reported discussions.

DeepSeek gained international attention after demonstrating advanced AI model capabilities that drew comparisons with some of the world’s leading laboratories. The company became a notable symbol of China’s fast moving AI sector and its ambition to compete with global leaders.

Unlike firms such as OpenAI or Anthropic, which generate revenue through subscriptions and API access, DeepSeek has made several of its models available for free.

That strategy has helped build visibility and adoption, but it also makes conventional revenue based valuation methods more difficult. Investors may instead be pricing DeepSeek on technology strength, future commercial potential, talent base, and strategic relevance.

The reported $20 billion valuation would place DeepSeek among the most valuable AI startups in China.

For comparison, MiniMax Group has been valued at around $40 billion, while Moonshot AI, known for its Kimi large language model series, has reportedly been seeking a valuation near $18 billion.

If completed at the current level, DeepSeek would sit near the top tier of Chinese AI startup valuations, signaling strong confidence in its long term prospects.

A successful capital raise would give DeepSeek significant resources to expand computing infrastructure, recruit engineering talent, train larger models, and accelerate product development.

AI companies worldwide are spending aggressively on chips, cloud capacity, and research teams. For DeepSeek, fresh funding could strengthen its position at a time when both domestic and global competition is intensifying.

The talks also underline how established technology giants are looking to secure influence in promising AI startups rather than relying only on in house development.

For now, discussions remain ongoing and no transaction has been finalized. Funding negotiations can change quickly, particularly when multiple strategic investors are involved.

Still, the reported jump from a $10 billion fundraising target to more than $20 billion within days marks a striking moment for the company and for China’s broader AI sector.

If DeepSeek completes a deal near the reported valuation, it would become one of the clearest signs yet that investor appetite for high potential AI firms remains strong despite rising costs and fierce competition worldwide.