DeepSeek's Funding Round Just Outgrew Its Own Target

DeepSeek went looking for about 50 billion yuan. It is about to take at least 80 billion. Bloomberg reported on October 6, citing people familiar with the matter, that the Hangzhou lab is close to securing a minimum of 80 billion yuan, roughly $12 billion, and that based on signed term sheets the final total could approach 100 billion yuan. Tencent and the battery maker CATL have committed among the largest amounts.

Reuters, which matched the report through its own source, said DeepSeek is set to raise more than 80 billion yuan, or $11.93 billion, and that the round is expected to close this month. Neither DeepSeek, Tencent nor CATL commented. Quartz noted that DeepSeek was closed for a Chinese public holiday when the news broke.

A round that kept growing

The original numbers were more modest. According to Bloomberg, as summarized by Quartz, DeepSeek set a target of around 50 billion yuan, and investor demand overshot it after the launch of the company's newest model. Reuters reported that the round began in July with a target valuation of 500 billion yuan, about $74 billion, and that it followed DeepSeek's maiden outside raise of about $7.4 billion roughly a month earlier. Bloomberg put the valuation at a minimum of 500 billion yuan, roughly $75 billion.

That makes two raises in about four months for a company that, as Euronews noted, relied mainly on founder Liang Wenfeng's hedge fund, High-Flyer, until this year. The investor list has also hardened. Quartz reported that Tencent's earlier 10 billion yuan commitment was the largest single investment DeepSeek had received at the time. Tencent is now joined at the top by CATL, the world's largest maker of electric-vehicle batteries, a backer with an obvious interest in energy-hungry data centers.

The money has a destination. Per the Quartz summary of Bloomberg's reporting, part of the round will fund a large data center in Inner Mongolia, where DeepSeek plans to install at least 160,000 of Huawei's highest-end accelerators. Reuters noted that DeepSeek recently partnered with Huawei to build programming tools optimized for Ascend chips. Read together, the round is a bet on domestic silicon at a scale DeepSeek has not operated before.

The IPO moves to 2027

The bigger change since last month is the timeline. Last month, Reuters reported that DeepSeek had hired CITIC Securities to prepare a potential listing on Shanghai's STAR Market, and Flux covered the plan as a listing process meant to start this year. Bloomberg now reports that DeepSeek plans to restructure after this round closes, in preparation for an IPO in early 2027.

Bloomberg's report, as relayed by Quartz, did not name a venue. The most recent venue reporting remains Reuters' September account of a STAR Market listing, and Reuters said the timing, valuation and size of any offering remain undecided. The Hong Kong IPO targeted for the first quarter of 2027, reported the same day, belongs to a different lab.

Moonshot takes Hong Kong

Bloomberg reported the same day that Moonshot, maker of the Kimi models, is preparing a Hong Kong IPO aimed at the first quarter of 2027 that could raise up to $5 billion. According to Euronews, which summarized the report, Bank of America is coordinating, with CICC, Deutsche Bank and Goldman Sachs as sponsors, and early meetings to test investor demand could begin this month.

Moonshot is the comparable DeepSeek will be priced against. Euronews reported that Moonshot's valuation reached about $50 billion after its last private round, up from $31.5 billion this summer, and that its annual recurring revenue rose from $300 million in June to about $1 billion, with $2 billion expected by December. Its Kimi K3 open model was released in July. Zhipu and MiniMax already listed in Hong Kong in January, and MiniMax's shares more than doubled on their first day.

That gives Hong Kong investors a revenue story and a recent trading record. DeepSeek has neither in public. Its revenue has never been formally disclosed, and its strategy still centers on giving models away. Quartz reported that at investor meetings Liang committed to keeping DeepSeek's models open and described artificial general intelligence as the goal, with commercial returns secondary.

The risks that travel with the money

Two items in the reporting deserve weight. First, Quartz reported that the fundraising was briefly paused after remarks attributed to Liang about the U.S.-China AI rivalry spread on social media. A round this large being sensitive to a founder's comments says something about how closely the deal is being watched.

Second, Euronews reported that the Cyberspace Administration of China is investigating both DeepSeek and Moonshot over whether they routed sensitive user data to Anthropic's Claude, with reports of the probe emerging last month. Anthropic has separately accused both companies of using its model to train their own. It is unclear how the probe could affect either IPO. A domestic regulator examining a company's data handling while that company restructures for a listing is not a detail prospectus lawyers can leave out.

What to watch

Whether the round closes in October, as Reuters expects, and whether the final figure lands near 100 billion yuan. The restructuring that follows will show what kind of company DeepSeek intends to list, and how much control High-Flyer and Liang keep.

The venue confirmation. If DeepSeek stays on the STAR Market, it lists into a domestic pool that has priced strategic tech companies generously. If it follows Moonshot to Hong Kong, it lists against a peer with disclosed revenue and a head start. Either way, two Chinese frontier labs are now lined up for the same quarter, and the first to price will set the terms for the second.