US Blocks DeepSeek as China Funds AI Race

Just days after Washington ordered agencies to purge its software, a Chinese AI startup secured a massive new funding round.

DeepSeek, an artificial intelligence lab based in Hangzhou, has reportedly raised approximately 15 billion dollars, which is roughly 100 billion yuan. This injection of capital is described as one of the largest financing events ever recorded in the country. Bloomberg reported the details of the transaction. The fundraising activity began mere days after the United States ordered federal civilian agencies to remove DeepSeek's AI technology from their systems. That federal directive cited specific security concerns regarding the technology. Potential contributors to this new round reportedly include the battery maker CATL and Tencent, the company that operates WeChat.

This is not the first time DeepSeek has attracted significant financial backing. Earlier this year, in June, the company raised more than 7 billion dollars. That round valued the firm at 50 billion dollars. Reports from July also indicated the startup was seeking an additional 1.5 billion dollars. That specific request would have placed the valuation near 71 billion dollars. The company has also shared plans to pursue an initial public offering in China as soon as next year. With this latest capital, the startup is increasing its spending on AI infrastructure. The funds will also support the development of open models for markets both inside and outside of China. The company is moving forward with expansion even while facing restrictions within the United States. This growth could intensify competition among domestic rivals in the region.

The capital flowing into DeepSeek is part of a much larger trend regarding investment in artificial intelligence. Investors worldwide are pouring billions into companies to compete in the global AI race. This includes funding for firms based in China. For instance, the developer of Kimi, Moonshot AI, secured 2 billion dollars at a valuation of 20 billion dollars back in May. Earlier this month, Manus AI raised more than 500 million dollars. Market capitalizations for other Chinese firms remain significant as of October 22, 2026. Zhipu AI, also known as Z.ai, has a market cap of roughly 29 billion dollars. MiniMax is valued at approximately 7.2 billion dollars. Both of those companies completed public listings in Hong Kong in January.

DeepSeek was founded in 2023 by Liang Wenfeng. He previously co-founded High-Flyer, a Chinese quantitative hedge fund. That fund helped finance the early development of the AI startup. DeepSeek gained global attention in early 2025. The company released a free-to-use, open-weight R1 reasoning model. This release challenged the dominance of U.S. AI companies. Liang Wenfeng retains an estimated 81.6% stake in its Chinese operating entity. That ownership figure remains following the earlier funding round. This information comes from corporate ownership data analyzed by WireScreen. DeepSeek did not immediately respond to a request for comment regarding the latest funding.