China’s DeepSeek is reportedly preparing to raise more than $11.9 billion in fresh funding as the AI company builds a larger financial war chest ahead of a potential domestic IPO.

Chinese artificial intelligence startup DeepSeek is preparing to raise more than 80 billion yuan, or roughly $11.9 billion, in a new funding round, according to people familiar with the matter cited by Reuters. The proposed financing would represent one of the largest private investments in an AI company and underline the growing importance of domestic AI champions in China’s technology strategy.

The company began its latest fundraising process in July with a target valuation of approximately 500 billion yuan, equivalent to around $74 billion. That would put DeepSeek among the most highly valued AI companies in the world.

The new financing effort comes only months after DeepSeek completed its first major external funding round, which raised approximately $7.4 billion. The company’s rapid fundraising trajectory reflects how quickly investor expectations around advanced AI have changed.

From AI newcomer to strategic technology company

DeepSeek gained international attention after the release of its R1 reasoning model, which demonstrated competitive performance while generating significant discussion about the cost of developing advanced AI systems.

The company has since continued expanding its model lineup and infrastructure strategy. Its development has also become closely connected to China’s broader effort to reduce reliance on foreign AI hardware.

DeepSeek has been working to optimize its software for Huawei’s Ascend processors, an important development as Chinese companies face restrictions on access to some advanced Nvidia chips.

That hardware-software relationship could become increasingly important.

Rather than simply building AI models, Chinese AI companies are increasingly being pushed toward developing an entire domestic technology stack—from computing hardware and cloud infrastructure to models and applications.

Why the funding matters

A funding round of this size would give DeepSeek considerably more resources to train models, acquire computing capacity, recruit researchers and develop commercial products.

It would also give the company greater flexibility as competition intensifies among Chinese AI laboratories.

The race is no longer simply about producing the most capable model. Companies increasingly need to compete on inference costs, reliability, developer adoption, enterprise integration and access to computing infrastructure.

DeepSeek’s potential IPO adds another dimension.

A public listing could provide the company with access to additional capital while giving Chinese investors exposure to one of the country’s most strategically important AI businesses. Reuters previously reported that DeepSeek has been preparing for a Shanghai listing while pursuing a valuation around $74 billion.

The bigger AI race

DeepSeek’s fundraising plans also highlight how the global AI competition is evolving.

The first phase of the AI boom focused heavily on model capabilities. The next phase is increasingly about scale, infrastructure and deployment.

Companies need enormous amounts of computing power to train and operate advanced models. They also need data centers, networking equipment, specialized chips and software infrastructure.

That means the winners of the AI race may ultimately include companies that can build sustainable ecosystems rather than simply release impressive models.

For DeepSeek, the next challenge will be turning technological momentum into a durable commercial business.