According to Bloomberg News, citing people familiar with the matter, the Hangzhou-based AI company verbally notified some prospective backers that they would not be signing the expected investment documents in the coming days.
The report added that DeepSeek could revisit the fundraising process at a later date, although the company has not publicly confirmed the decision.
Reuters reported that it could not independently verify the development, while DeepSeek was not immediately available for comment outside normal business hours.
Fundraising Plans Targeted $74 Billion Valuation
DeepSeek had been preparing for a major capital raise that would have valued the company at approximately 500 billion yuan ($74 billion).
The planned round followed the startup’s successful first fundraising effort, which reportedly secured about $7.4 billion, attracting significant attention from investors seeking exposure to China’s rapidly expanding artificial intelligence sector.
The pause comes as DeepSeek continues to draw global attention following the rapid rise of its AI models, which have challenged assumptions about the cost and development of advanced artificial intelligence systems.
Founder’s Concerns Reportedly Influence Decision
Bloomberg reported that the fundraising delay was partly linked to concerns from DeepSeek founder Liang Wenfeng over online reports covering comments he made to investors during the company’s first funding round.
The reports allegedly contributed to frustrations around how discussions with investors were being portrayed publicly, influencing the company’s decision to slow down the investment process.
DeepSeek’s leadership has previously maintained a low public profile, with the company focusing primarily on research and product development rather than extensive public fundraising campaigns.
Possible IPO Adds to DeepSeek’s Growth Plans
The funding pause comes amid reports that DeepSeek has begun early discussions about a potential initial public offering (IPO) on China’s Shanghai Stock Exchange STAR Market, a technology-focused board often compared with the Nasdaq.
An IPO listing would provide another potential route for the company to raise capital as it seeks to expand its artificial intelligence capabilities and compete in an increasingly competitive global AI market.
Founded in Hangzhou, DeepSeek has emerged as one of China’s most closely watched AI startups, with its rapid progress intensifying competition among technology companies developing advanced AI models.
The company’s decision to delay its latest fundraising round suggests it may be reassessing its financing strategy as it weighs investor interest, market conditions and future expansion plans.