Another artificial intelligence startup is preparing to go public - this time in China. DeepSeek (
DEEPSEEK) is eyeing an initial public offering in Shanghai as early as the second quarter of next year,
The Wall Street Journal reported. The startup was thrust into the limelight last year after it released an AI model that was made at a fraction of the cost of its U.S. rivals, shocking Silicon Valley.
Road to IPO: DeepSeek is in talks with investors and banks for the listing and is targeting to
file its IPO paperwork by the end of this year, people familiar with the matter told
WSJ. The IPO timeline is subject to change and regulatory approval. DeepSeek is targeting to have its financial reports finished by December,
Bloomberg News reported on Tuesday. The company largely relied on its founder Liang Wenfeng's personal
wealth and capital from his hedge fund until recently. Last month, DeepSeek raised $7.4B in its first external funding round, valuing it at over $50B. Liang Wenfeng invested about $3B of his money, with Tencent (
TCEHY), battery maker CATL (
CYATY), JD.com (
JD), NetEase (
NTES) and a state-backed AI fund participating in the round.
Spending boom: This month, Liang began talks to raise money in a new
funding round that could value the startup at $71B or more. The founder is being selective in choosing investors for the upcoming funding round to ensure that commercial interests don't interfere with DeepSeek's long-term push in frontier AI research, sources told
WSJ. The details of the new round have not yet been finalized. When pitching investors in May, Liang said DeepSeek could lose momentum if it lacks funds to retain top talent and expand computing infrastructure. The company has reportedly ramped up spending to build its own data center and purchase more AI chips. It also announced a recruitment drive to double its workforce across core teams.
AI race: Chinese tech firms are pushing ahead with raising funds for AI research and data center expansions as they race to
keep up with the U.S. TikTok developer ByteDance (
BDNCE) is in talks with banks for its largest
offshore loan of about $20B as it boosts AI spending. Zhipu AI recently raised $4B through a Hong Kong
share sale following its January IPO. ChangXin Memory Technologies (CXMT), China's top memory chipmaker, this week said it expects to raise over $8.5B before any overallotment option in its Shanghai IPO – double its original target. If an overallotment option is fully exercised, proceeds could rise to nearly $10B. CXMT is expected to list on Shanghai's Nasdaq-style STAR Market on July 27, in what would be the largest IPO in Asia this year.
The Tectonic AI Shift Is Here
