DeepSeek’s first round of nearly $50 billion RMB funding is close to being finalized, with Alibaba and Tencent each investing 10 billion.

According to a report by PanDaily on May 11, citing insiders, the first round of funding for China’s AI company DeepSeek is close to being finalized, with a funding size of about 50 billion yuan (about $7.35 billion). If it is successfully completed, it will break China’s record for single-round funding by an AI company. Citing information from insiders, multiple media outlets said the funding structure is that Alibaba, Tencent, and the National Integrated Circuit Industry Investment Fund each contribute 10 billion yuan.

Funding structure and investor lineup

According to PanDaily’s report, insiders revealed that Huawei has also been rumored to participate in investment negotiations, though the extent of its involvement has not yet been independently verified. The insiders also said that traditional top-tier venture capital (VC) and private equity (PE) firms were unable to enter this round.

According to a report from Baijing Laboratory, Alibaba was initially a hot candidate investor for the funding, but ultimately got stuck in a deadlock during negotiations. The report said that Tencent and state investors later filled the gaps, creating a competitive bid situation and pushing the valuation beyond DeepSeek’s initial expectations.

Talent crisis and computing power challenge

According to PanDaily’s report citing insiders, this round of funding directly corresponds to the dual pressures of talent and computing power that DeepSeek is facing. The report said that core backbone figure Guo Daya left to join ByteDance due to pay being inverted and insufficient computing resources. To stabilize the core team, the insiders said that DeepSeek has currently doubled its overall compensation, and the equity option size for core researchers has reached a level of eight digits in yuan.

In terms of computing power, PanDaily cited insiders as saying that although DeepSeek’s V4 model’s actual performance is already close to GPT-5.4’s level, major technical obstacles remain in adapting the underlying software and hardware to Huawei’s Ascend chips. Some operators even need help from DeepSeek engineers to complete the coding for Huawei, and the company urgently needs more funding to directly purchase high-end computing power resources.

Liang Wenfeng’s stance on independence and negotiations with Alibaba

According to insiders cited in PanDaily and the Baijing Laboratory report, founder Liang Wenfeng insisted throughout the entire funding process on refusing to cede control rights to any major online platform or provide technology priority usage rights. The insiders said that Liang Wenfeng’s core stance is to oppose DeepSeek becoming a strategic asset of any major technology platform, and he wants the company to maintain its independent positioning as a scientific research institution.

According to the Baijing Laboratory report, the ecosystem integration conditions proposed by Alibaba during the financing negotiations were fundamentally contradictory to DeepSeek’s independence stance, ultimately causing the negotiations to collapse.

Business transformation plan

According to PanDaily’s report citing insiders, after the funding was close to being finalized, DeepSeek is accelerating its transition from a pure research institution to AI product development and commercialization. The insiders said the company plans to release the multimodal large model V4.1 in June 2026. Reports said DeepSeek’s recent recruiting focus has clearly shifted toward multimodal and Agent-direction talent with experience in commercial implementation.

Frequently asked questions

What are the amount, structure, and valuation of DeepSeek’s funding round?

According to PanDaily’s May 11, 2026 report citing insiders, the funding round is about 50 billion yuan (about $7.35 billion). The structure is that Alibaba, Tencent, and the national fund each inject about 10 billion yuan, with founder Liang Wenfeng personally contributing about 20 billion yuan, and the company’s valuation is about 350 billion yuan. All the above figures come from anonymous insiders, and there has been no public confirmation from any party.

Why did Alibaba’s negotiations fall apart?

According to the Baijing Laboratory report, the ecosystem integration conditions proposed by Alibaba during the funding negotiations were fundamentally incompatible with the company independence stance that founder Liang Wenfeng insisted on. Ultimately, consensus could not be reached, and Tencent and state investors then stepped in.

How will this funding round address DeepSeek’s talent and computing power pressures?

According to PanDaily citing insiders, the funding is expected to be used to directly purchase high-end computing power resources and to support a compensation reform. According to reports, DeepSeek has already doubled its overall compensation, and equity options for core researchers have reached an eight-digit level in yuan, to address the problem of the previous core backbone leaving.