DeepSeek Pauses $70B Round After Founder's Leak
DeepSeek suspended a second funding round targeting a valuation above $70 billion after comments attributed to founder Liang Wenfeng went viral, days before a planned mainland China IPO.
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DeepSeek has hit pause on its own money. The Hangzhou lab suspended talks on a second funding round in the past few days, shortly before backers expected to sign, after comments attributed to founder Liang Wenfeng about Nvidia chip dependence and China's AI gap with the US spread online and reportedly angered him, Bloomberg reported on July 25. The timing is awkward. DeepSeek is simultaneously lining up a mainland China IPO that people familiar with the plans say could be filed before the year is out.
TL;DR
- DeepSeek suspended a second funding round that had targeted at least 10 billion yuan (about $1.4 billion) at a pre-money valuation above 480 billion yuan (roughly $70.8 billion)
- The pause followed viral posts attributed to founder Liang Wenfeng discussing Nvidia chip dependence and China's AI lag versus the US; Bloomberg says it hasn't verified the posts are authentic
- The new round would have been a sharp step up from DeepSeek's first outside raise, which closed in June 2026 at $7 billion on a $50 billion valuation
- DeepSeek is preparing a mainland China IPO that could be filed later this year, according to people familiar with the matter
A Round That Moved Fast, Then Stopped
DeepSeek didn't take outside money for years. That changed this spring, when DeepSeek's first outside funding talks went from a modest plan to a bidding contest in about six weeks. China's state-backed chip investment vehicle, the China Integrated Circuit Industry Investment Fund, known as the Big Fund, pushed the valuation from $10 billion in April to $45 billion by early May. Tencent joined the talks. By the time the round closed in June, DeepSeek had raised $7 billion at a $50 billion valuation, with the battery maker Contemporary Amperex Technology (CATL) also taking a stake, according to Fortune's account of the deal's aftermath. That single round reportedly doubled Liang's net worth to $36 billion, making him the wealthiest AI lab founder in the world.
The Numbers On the Table Now
The paused round was set to move faster and higher. Term sheets circulating among prospective backers targeted at least 10 billion yuan, about $1.4 billion, at a pre-money valuation of at least 480 billion yuan, roughly $70.8 billion. That's more than 40% above June's $50 billion mark, reached in barely a month of talks. Investors were told the agreements would close within days. They didn't.
What Reportedly Went Viral
The posts that derailed the round, according to Bloomberg, were attributed to Liang and touched on DeepSeek's reliance on Nvidia chips for training and inference, with blunter-than-usual remarks on how far China's frontier labs still trail their US rivals. Bloomberg says it hasn't confirmed the leaked transcript is genuine, and DeepSeek hasn't issued a public statement either way. What multiple outlets do agree on: prospective investors were told management would keep focusing on long-term research over near-term commercialization of models like DeepSeek V4, and that the round was off, at least for now.
Chip dependence is central to the leak: DeepSeek's frontier models still train and serve on Nvidia hardware despite years of US export restrictions.
Source: unsplash.com
| Round | Date | Raised | Pre-money valuation | Lead backers |
|---|---|---|---|---|
| First outside raise (talks) | Mar-Apr 2026 | targeted $300M | climbed $10B to $45B | Big Fund, Tencent (negotiating) |
| First outside raise (closed) | June 2026 | $7B | $50B | Big Fund, Tencent, CATL |
| Second raise (paused) | July 2026 | targeted $1.4B+ | $70.8B+ | Suspended before signing |
Who Benefits
Liang comes out of this with more control, not less. A round that never closes can't dilute existing shareholders, and it can't set a valuation Liang didn't fully sign off on. Existing backers benefit too. Big Fund, Tencent, and CATL all bought in at $50 billion; a round that stalls before signing protects that stake from an awkward down-the-line comparison if a rushed private valuation later looks inflated next to an IPO price. Beijing's broader interest in DeepSeek as a national AI champion is also served by a pause rather than a messy public dispute over a leaked transcript playing out mid-raise.
Who Pays
The investors who lined up capital for a deal that Bloomberg says was expected to close within days are now sitting on committed money with nowhere to put it. DeepSeek's fundraising story, built on being the lab that turned down outside cash until it didn't need to negotiate from weakness, takes a dent regardless of whether the leaked comments are real. A founder whose own words - real or not - are credible enough to freeze a $70 billion valuation overnight is a founder whose next round will get more scrutiny, not less.
DeepSeek's reported IPO plans point toward a mainland listing, with Shenzhen's ChiNext board seen as a more likely venue for a tech listing than Shanghai's main board.
Source: wikimedia.org
The IPO timeline is the part that makes this pause more than an internal scheduling problem. A private round priced at $70.8 billion sets an anchor that public-market investors would inevitably compare against an IPO price months later. Pull that anchor before it's set, and DeepSeek buys itself room to let the IPO process, not a rushed private negotiation, set the number the market actually has to live with.
A funding pause triggered by a leak is a small thing until you remember that a $70 billion valuation depends entirely on backers believing management's account of itself, and Liang Wenfeng just gave them a reason to ask which account is true.
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