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DeepSeek isn’t taking VC money yet — here are 3 reasons why | TechCrunch
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Relevant to understanding the geopolitical and financial dynamics around frontier AI development outside the US, particularly how Chinese labs like DeepSeek are structured and governed differently from Western counterparts.
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Importance: 25/100news articlenews
Summary
TechCrunch analyzes why DeepSeek, the Chinese AI lab behind high-performing open-weight models, has so far declined venture capital funding. The article explores strategic, regulatory, and structural reasons for this unusual financing posture in the competitive AI landscape.
Key Points
- •DeepSeek is backed by the Chinese quantitative hedge fund High-Flyer, giving it financial independence from external VC pressure.
- •Accepting Western VC money could expose DeepSeek to US regulatory scrutiny or export control complications.
- •Remaining private and self-funded allows DeepSeek to avoid governance obligations and maintain strategic opacity.
- •DeepSeek's cost-efficient model development (e.g., R1) reduces capital needs compared to US frontier labs.
- •The funding structure reflects broader geopolitical tensions shaping how Chinese AI companies operate internationally.
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DeepSeek isn’t taking VC money yet — here are 3 reasons why | TechCrunch
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DeepSeek isn’t taking VC money yet — here are 3 reasons why
Charles Rollet
12:12 PM PDT · March 10, 2025
DeepSeek’s founder Liang Wenfeng is in no hurry to get investment from outsiders, the WSJ reported Monday.
DeepSeek is one of the hottest AI startups in the world right now after the Chinese AI company took Silicon Valley by storm with its latest model earlier this year.
Unlike DeepSeek’s AI model provider counterparts, who regularly announce mega-rounds filled with prominent investors, Liang hasn’t announced any fundraises, despite lots of VC interest. Rumors about its supposed investors have even fueled (baseless) rallies in some Chinese stocks.
DeepSeek’s founder doesn’t want to lose control
An analysis of Chinese corporate records done by TechCrunch shows that DeepSeek is 84% owned by Liang. The rest of the startup is owned by individuals affiliated with Liang’s hedge fund, High-Flyer.
That means that unlike most startups, which require outside capital and are thus used to at least some external influence, DeepSeek is basically a one-man show. And Liang doesn’t have the highest regard for VCs’ opinions.
When Liang was trying to raise capital in the past, he was put off by VCs’ focus on rapidly monetizing AI as opposed to fundamental research, he said in a 2023 interview with Chinese media .
So one big reason why Liang hasn’t said yes to the investors pounding down his door is that he doesn’t want to share control of his company, the WSJ reported.
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