DeepSeek, a Chinese AI startup, is seeking additional capital just weeks after securing its first $7 billion funding round. The company, based in Hangzhou, aims to use the new funds to build its own data centers and purchase AI chips, according to reports. The fresh capital would support an aggressive expansion strategy, including the development of its own inference chip to reduce reliance on Nvidia and Huawei. Founder Liang Wenfeng contributed about $3 billion, making him the largest backer, while other investors include CATL, Tencent, JD.com, NetEase, and China's state-backed AI fund.
The need for capital is tied to DeepSeek's strategy of offering rock-bottom pricing on its new V4 models. The V4-Pro and V4-Flash models, with up to 1.6 trillion parameters, are priced roughly eleven times cheaper than GPT-5.5 on input. This aggressive pricing has driven rapid growth among US businesses, with DeepSeek ranking among the fastest-growing software vendors in June, according to Ramp, a US financial services firm. However, Ramp also noted security risks due to companies sending data directly through DeepSeek's platform.
The performance gap with Western models has widened, as OpenAI's GPT-5.6 Sol and Anthropic's Claude Mythos have reached a new tier that DeepSeek cannot match yet. Still, the price gap remains significant, with DeepSeek's models offering a much more affordable alternative. Meanwhile, competition within China is intensifying, with rivals like Zhipu AI, MiniMax, and Moonshot AI pushing hard to gain market share. Moonshot AI, the company behind Kimi, is reportedly seeking fresh capital at a valuation of up to $30 billion.
Source: thedecoder
