DeepSeek Seeks Funding at Valuation Above $20 Billion Amid AI Chip Controversy

DeepSeek, the Chinese AI startup backed by High-Flyer Capital Management, is in advanced talks to raise over $300 million at a valuation exceeding $20 billion. Investor interest has surged since initial discussions targeted a $10 billion valuation earlier this week. The final terms remain fluid as U.S. venture capital firms weigh geopolitical risks.

The funding push coincides with revelations that DeepSeek trained models on Nvidia's restricted chips while withholding flagship AI performance data from American semiconductor partners. Nvidia CEO Jensen Huang warned of strategic consequences if Chinese firms like DeepSeek optimize for Huawei's hardware ecosystem, calling it 'a horrible outcome' for U.S. tech dominance.

Market impact reverberates from Beijing to Silicon Valley as Tencent and Alibaba escalate China's AI arms race. DeepSeek's January 2025 model release previously triggered a global tech selloff, forcing competitors to accelerate their own upgrades.