Liang Wenfeng, the founder of DeepSeek, is not rushing to secure outside investments, according to a report by the WSJ published on Monday.
DeepSeek has emerged as one of the most talked-about AI startups globally, having captivated Silicon Valley with its innovative model earlier this year.
In contrast to its competitors in the AI model space, who frequently announce significant funding rounds involving high-profile investors, Liang has yet to disclose any fundraising efforts, despite considerable interest from venture capitalists. Speculation surrounding potential investors has even sparked unwarranted surges in certain Chinese stocks.
DeepSeek’s founder is keen on retaining full control
An investigation into Chinese corporate records by TechCrunch reveals that Liang personally holds 84% of DeepSeek. The remainder is owned by individuals linked to his hedge fund, High-Flyer.
This structure grants Liang a rare degree of autonomy, especially compared to most startups that rely on external funding and its accompanying influence. Liang appears to hold a skeptical view of venture capitalists’ perspectives.
In a 2023 interview with Chinese media, Liang expressed his disillusionment with VCs, noting their emphasis on quick monetization rather than foundational research.
Thus, one of the key reasons behind Liang’s reluctance to engage with eager investors is his desire to maintain control over his company, as reported by the WSJ.
DeepSeek has yet to seek external funding
While many startups require investor capital from the outset, DeepSeek stands out. Liang has managed to fund the company through the profits generated by High-Flyer, limiting his need for outside investment.
“Financial resources have never been an issue for us; the challenge lies with the restrictions on advanced chip shipments,” Liang stated in 2023.
Investor participation may heighten trust and privacy issues
As a Chinese enterprise, DeepSeek must adhere to stringent laws that allow government access to extensive data.
These concerns have led to increasing bans on DeepSeek from various governments and select private corporations.
Such restrictions could intensify if DeepSeek accepts investments from a Chinese investor, who would face similar scrutinies.
Historically, the U.S. government has imposed sanctions on Chinese tech firms it believes are closely aligned with the state, including Huawei and DJI.
Despite this backdrop, reports from The Information indicate that some Chinese state entities have approached DeepSeek regarding funding, although there is no evidence that any have been accepted.
Reasons this could evolve
However, this does not rule out the possibility that DeepSeek might seek outside capital in the future.
Recently, DeepSeek announced a (largely theoretical) profit margin for the first time, indicating a potential shift toward monetization—an aspect that resonates with VCs, yet something Liang had previously dismissed.
To compete with other AI giants, DeepSeek will likely need access to superior AI chips—currently the primary limitation in its growth, as noted by Liang in 2023. The acquisition of these chips is costly and highly regulated in China due to U.S. export controls.
Moreover, DeepSeek’s capacity to remain self-sufficient may be waning. While High-Flyer has previously performed well, several of its flagship funds have struggled since 2022, according to the WSJ report.
The ongoing crackdown by the Chinese government on quant funds like High-Flyer since 2024 has also compounded the difficulties.
Although no specific names have emerged, reports suggest that giants like Tencent and Alibaba have shown interest in DeepSeek.
DeepSeek has not responded to requests for comments at this time.
Compiled by Techarena.au.
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