Sign of AI bubble? DeepSeek's Valuation Rockets to $71 Billion in Weeks as It Preps for an IPO.

Chinese AI startup DeepSeek is in talks for a new funding round that would value the Hangzhou-based company at roughly $71 billion to $74 billion before new money comes in, according to Reuters, just weeks after it closed its first-ever outside funding round in June at a post-money valuation near $52 billion. The company is simultaneously preparing paperwork for a possible mainland IPO filing as soon as late 2026, targeting a stock market debut in 2027 on Shanghai's STAR Market.

Founder Liang Wenfeng, who built DeepSeek out of his quantitative hedge fund High-Flyer, retains an estimated 78% to 84% ownership stake and has seen his personal net worth climb to about $36 billion as the valuation has risen. Backers in the June round included Tencent, battery maker CATL, and China's state-backed National Artificial Intelligence Industry Investment Fund, part of Beijing's push to build domestic AI champions less reliant on foreign chips. DeepSeek has not disclosed revenue figures, and the company has told prospective investors it plans to prioritize frontier AI research over near-term profit, even as it develops its own AI inference chip to reduce reliance on Nvidia hardware.

What supporters say:

  • The valuation jumped roughly 40% in under six weeks with no published revenue figures to justify the pace, a pattern common to speculative bubbles.

  • A US listing is considered unlikely given congressional scrutiny of Chinese AI firms, limiting DeepSeek's ultimate exit options compared to US rivals.

  • This would be DeepSeek's second outside funding round in two months, which can signal a company racing to lock in a high valuation before market sentiment shifts.

What critics say:

  • Tencent, CATL and China's state AI fund have all put real capital behind the company, a signal that sophisticated investors see durable value beyond hype.

  • DeepSeek's V3 and R1 models already proved the company can match Western frontier systems at a fraction of the training cost, a track record few AI startups can point to.

  • The capital raised is earmarked for concrete needs like gigawatt-scale data centers and custom chips, not just speculative growth.

What's your take?

Is DeepSeek's rapid valuation surge a sign of a broader AI investment bubble? Yes ↑ No ↓ Other ◇

Sources:

#DeepSeek #AI #China #IPO #TechFinance

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DeepSeek reportedly in talks to raise $1.5B, then IPO | TechCrunch
DeepSeek, the Chinese large language model developer, is said to be preparing for a 2027 IPO debut as it also looks to raise around $1.5 billion in new funds at a $71 billion valuation.
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