DeepSeek’s founder Liang Wenfeng is in no hurry to get funding from outsiders, the WSJ reported Monday.
DeepSeek is among the hottest AI startups on the planet proper now after the Chinese language AI firm took Silicon Valley by storm with its newest mannequin earlier this yr.
In contrast to DeepSeek’s AI mannequin supplier counterparts, who frequently announce mega-rounds crammed with outstanding traders, Liang hasn’t introduced any fundraises, regardless of plenty of VC curiosity. Rumors about its supposed traders have even fueled (baseless) rallies in some Chinese language shares.
DeepSeek’s founder doesn’t need to lose management
An evaluation of Chinese language company information 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 outdoors capital and are thus used to a minimum of some exterior affect, DeepSeek is mainly 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’ give attention to 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 need to share management of his firm, the WSJ reported.
DeepSeek hasn’t required outdoors funding – but
Most startups want capital from traders from the beginning. However DeepSeek is a novel beast. Liang has been capable of fund DeepSeek via Excessive-Flyer’s income, decreasing 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.
Buyers might deepen belief and privateness considerations
As a Chinese language firm, DeepSeek operates beneath strict Chinese language legal guidelines that grant its authorities broad information entry.
Issues over this have prompted DeepSeek bans from a rising variety of governments and even some personal corporations.
These bans might get even worse if DeepSeek accepts funding from a Chinese language investor, who face related 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 large 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 outdoors 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 will even probably want entry to extra and higher AI chips—the largest bottleneck on its growth, its founder Liang said in 2023. These chips are costly and closely restricted in China on account of U.S. export controls.
DeepSeek’s capacity to be self-funding may additionally be fading. Whereas Excessive-Flyer has carried out effectively 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 reviews.
DeepSeek didn’t instantly reply to a request for remark.