Chinese technology companies Tencent Holdings and Alibaba Group are negotiating investments in the artificial intelligence startup DeepSeek, according to a report from The Information on Wednesday, based on information from four sources familiar with the matter. DeepSeek, which is owned by the Chinese hedge fund High-Flyer Capital Management, is seeking funding at a valuation higher than $20 billion. The report noted that early talks with potential investors generated significant enthusiasm, according to one source. Representatives from Alibaba, Tencent, and DeepSeek did not provide immediate responses to inquiries. Reuters was unable to confirm the details independently. Alibaba’s shares traded on U.S. exchanges increased by 1.3% during premarket sessions. The Information had previously reported on Friday that DeepSeek began seeking external funding for the first time, aiming to secure at least $300 million at a minimum valuation of $10 billion. This fundraising effort highlights the substantial financial demands involved in building and maintaining sophisticated AI systems, particularly amid advancements in complex reasoning and self-operating AI agents. Negotiations remain ongoing, and both the valuation and funding amount could be adjusted, per the report. As a China-based company, DeepSeek may face reluctance from some U.S. venture investors, as noted in prior coverage by the tech news outlet. Earlier this year, Reuters reported that the firm did not share its primary model with U.S. chip manufacturers for optimization testing and had developed one of its latest models using Nvidia’s top-tier chip, despite export restrictions. DeepSeek’s debut in January 2025 caused a worldwide technology stock decline and prompted competitors in China to enhance their own AI offerings.
