DeepSeek Considers Raising Outside Funding Amid Demand for AI Chatbot
Chinese artificial intelligence (AI) startup DeepSeek is reportedly considering raising outside funding for the first time, weeks after its AI chatbot app made headlines around the world.
The company was formed two years ago as a subsidiary of Chinese quantitative hedge fund High-Flyer Capital Management and has not raised outside money, The Information reported Wednesday (Feb. 19).
DeepSeek has sought to avoid pressure from investors to accelerate commercialization of its products and has been concerned that raising money from major Chinese investors could limit potential business opportunities in the U.S., according to the report.
However, the company has been prompted to consider outside funding as the surge in use of its AI chatbot created a need for more AI chips and servers, the report said.
In addition, many large investors and Chinese state-affiliated funds have contacted DeepSeek in recent weeks to express their interest in investing in the company, per the report.
As it stands, it is not clear what choice the company will make, the report said.
When DeepSeek’s new AI model was released in late January, it supplanted OpenAI’s ChatGPT as the most popular free app on the Apple App Store.
It also drove down tech stocks, as DeepSeek claimed that its model achieved comparable performance to those of its U.S. rivals while using substantially fewer Nvidia chips.
Gokul Naidu, a consultant for SAP, told PYMNTS at the time that DeepSeek was not just an AI model but “a wake-up call for the entire AI industry.”
“It challenges entrenched assumptions about the cost of innovation and offers a path forward where cutting-edge technology is both affordable and sustainable,” Naidu said. “As we move deeper into 2025, the conversation around AI is no longer just about power — it’s about power at the right price. And in this race, DeepSeek might just have redefined the finish line.”
DeepSeek also faced challenges in the days that followed. It was reported that Microsoft and OpenAI were investigating whether OpenAI’s data was improperly accessed by a group tied to DeepSeek; U.S. lawmakers were set to introduce legislation outlawing DeepSeek’s AI chatbot on government devices; and DeepSeek was limiting access to its API service because of shortages with its server capacity.
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