DeepSeek’s founder Liang Wenfeng is in no hurry to get funding from outsiders, the WSJ reported Monday.
DeepSeek is without doubt one of the hottest AI startups on this planet proper now after the Chinese language AI firm took Silicon Valley by storm with its newest mannequin earlier this yr.
Not like DeepSeek’s AI mannequin supplier counterparts, who usually announce mega-rounds full of distinguished traders, Liang hasn’t introduced any fundraises, regardless of numerous VC curiosity. Rumors about its supposed traders have even fueled (baseless) rallies in some Chinese language shares.
DeepSeek’s founder doesn’t wish to lose management
An evaluation of Chinese language company data by TechCrunch reveals that DeepSeek is 84% owned by Liang himself. The remainder of the startup is owned by people affiliated with Liang’s hedge fund, Excessive-Flyer.
That implies that not like most startups, which require exterior capital and are thus used to at the least some exterior affect, DeepSeek is principally a one-man present. And Liang doesn’t have the best regard for VCs’ opinions.
When Liang was attempting to lift capital previously, he was delay by VCs’ concentrate on quickly monetizing AI versus basic analysis, he stated in a 2023 interview with Chinese media.
So one massive motive why Liang hasn’t stated sure to the traders pounding down his door is that he doesn’t wish to share management of his firm, the WSJ reported.
DeepSeek hasn’t required exterior funding – but
Most startups want capital from traders from the beginning. However DeepSeek is a singular beast. Liang has been in a position to fund DeepSeek by means of Excessive-Flyer’s earnings, lowering his want for out of doors funding.
“Cash has by no means been the issue for us; bans on shipments of superior chips are the issue,” Liang said in 2023.
Traders may deepen belief and privateness considerations
As a Chinese language firm, DeepSeek operates below strict Chinese language legal guidelines that grant its authorities broad knowledge entry.
Issues over this have prompted DeepSeek bans from a rising variety of governments and even some non-public corporations.
These bans may get even worse if DeepSeek accepts funding from a Chinese language investor, who face comparable points.
The U.S. authorities has a historical past of sanctioning Chinese language tech corporations it says are near the Chinese language authorities, like telecom big Huawei and in style dronemaker DJI.
That hasn’t stopped some Chinese language state entities from approaching DeepSeek for funding, The Data reported, though there’s no indication DeepSeek has accepted any.
Why this might all change
This doesn’t imply DeepSeek won’t ever increase exterior capital, although.
Earlier this month, DeepSeek introduced a (largely theoretical) revenue margin for the primary time, signaling a shift towards monetization—one thing VCs worth, however that Liang beforehand dismissed.
To maintain up with different AI heavyweights, DeepSeek can even seemingly want entry to extra and higher AI chips—the largest bottleneck on its improvement, its founder Liang said in 2023. These chips are costly and closely restricted in China as a consequence of U.S. export controls.
DeepSeek’s capacity to be self-funding may additionally be fading. Whereas Excessive-Flyer has performed nicely previously, a few of its flagship funds have underperformed since 2022, the WSJ reported.
It additionally doesn’t assist that the Chinese language authorities has been cracking down on quant funds like Excessive-Flyer since 2024.
Whereas few concrete names are circulating, DeepSeek has already drawn curiosity from Tencent and Alibaba, in keeping with a number of information stories.
DeepSeek didn’t instantly reply to a request for remark.