DeepSeek pauses second funding round after founder's viral remarks on the US-China compute gap

DeepSeek has reportedly told prospective investors it is pausing its second fundraising round, days after comments attributed to founder Liang Wenfeng about the US-China AI computing gap went viral online.

The pause halts a round that had targeted at least 10 billion yuan, or about $1.4 billion, at a pre-money valuation of at least 480 billion yuan. That would be up from the roughly $50 billion valuation in the Chinese AI startup’s first outside round, which closed in June. DeepSeek verbally told some backers they would not be signing investment agreements as expected in the coming days, people familiar with the talks say.

DeepSeek’s fundraising is watched closely as a gauge of investor appetite for Chinese frontier-AI developers, and a valuation near 480 billion yuan would rank it among the country’s most valuable AI startups.

The trigger, by those accounts, was a viral transcript of remarks attributed to Liang on how far China’s AI compute lags the United States, a sensitive subject for a company that has become a symbol of Chinese AI ambition since its low-cost models rattled the industry.

The authenticity of the transcript has not been independently verified, and DeepSeek could resume the process later. Neither the pause nor Liang’s purported comments has been confirmed by the company.