China’s DeepSeek is getting ready to flog shares in Shanghai as AI research costs start chewing through the bank balance.
According to The Wall Street Journal the Hangzhou AI outfit is preparing for an initial public offering as soon as the second quarter of next year, according to people familiar with the plan.
DeepSeek is in talks with investors and banks about a Shanghai listing and plans to file its IPO paperwork by the end of this year. Last month, the company raised $7.4 billion in its first external funding round, with investors valuing it at more than $50 billion.
DeepSeek founder Liang Wenfeng has begun sounding out prospective investors for another funding round, according to the same people.
Liang is said to be chasing a valuation of $71 billion or more, which is punchy even by AI bubble standards. Investor interest is apparently running hot, and DeepSeek expects to drag in several billion dollars from the looming round.
Liang has been picky about backers because he does not want commercial bean-counters mucking about with DeepSeek’s long-term frontier AI research.
Chinese AI companies are scrambling to lock in capital for costly research and data-centre expansion. Nerves have been jangling across China’s AI scene since Anthropic rolled out its powerful Mythos system in April.
Industry executives and researchers reckon China’s AI industry could lose ground to the US unless it gets a fresh flood of capital.
DeepSeek founder Liang Wenfeng told investors in May that the startup could lose momentum without cash to keep top talent and expand computing infrastructure.
Until recently, DeepSeek leaned mostly on Liang’s personal fortune and cash from a hedge fund he co-founded.
Alibaba chairman Joe Tsai said in June in Paris: “In the China context, we’re very underinvested in infrastructure and in the AI supply chain.”
TikTok parent ByteDance is talking about borrowing $20 billion, which could become its largest loan outside China, as it ramps up AI spending.
Beijing-based Zhipu AI recently raised $4 billion through a share sale after its January IPO. Its market capitalisation has since surged more than tenfold to top $90 billion, which suggests investors have not yet misplaced their chequebooks.
Chinese regulators have lately loosened rules so AI startups can list on a Nasdaq-like market in Shanghai, even when profits remain missing in action.
DeepSeek’s IPO timetable could still shift and needs regulatory clearance, according to people familiar with the plan.
In its last funding round, DeepSeek pulled in backing from a state fund focused on AI, tech giant Tencent and battery maker Contemporary Amperex Technology. Last month, DeepSeek announced a hiring push and said it wanted to double its workforce across core teams.
