DeepSeek, once hailed as a breakthrough force in China’s artificial intelligence race, is now reportedly seeking fresh funding after a year marked by rising challenges and shifting strategy.
Market sources say the company, founded by Liang Wenfeng, is exploring a new funding round that could value it at around 10 billion USD. The move would mark a sharp reversal from 2025, when Liang publicly rejected venture capital and insisted the company had no fundraising plans.
The change comes as cracks emerge in DeepSeek’s growth story. Once praised for its cost-efficient AI models and rapid innovation, the company has faced delays in product development, including the anticipated successor to its R1 model. At the same time, several key researchers have reportedly left, raising concerns about internal stability.
A central challenge lies in DeepSeek’s heavy reliance on NVIDIA’s ecosystem. While the startup gained an edge by optimizing performance at the low-level PTX layer within CUDA, this deep integration now makes any shift toward alternative chips significantly more complex. Transitioning away would require rewriting core infrastructure, increasing both cost and development time.
This technical constraint is seen as a major factor behind slower progress over the past year. As China pushes for domestic semiconductor independence, DeepSeek’s earlier advantages have effectively turned into structural limitations.
Despite these hurdles, investor interest remains strong. Venture capital firms continue to view DeepSeek as a rare asset in China’s AI landscape, betting on its proven innovation capabilities and the track record of its founder. Analysts note that even if technical setbacks persist, the company’s long-term potential could still justify new funding.
However, questions remain over the company’s direction. Moving toward external funding could signal a shift from its previously independent, research-driven model to a more commercial strategy. That transition would require DeepSeek to address a new challenge: turning advanced AI capabilities into sustainable revenue.
After a year of intense hype and rising expectations, DeepSeek now appears to be at a turning point, balancing between maintaining its “exception” status and adapting to the realities of capital, competition and technological constraints.
