Tencent and Alibaba discuss an investment in the artificial intelligence startup DeepSeek. The company seeks a valuation that could exceed $20 billion. This target doubles the startup's previous valuation of $10 billion.
DeepSeek seeks external capital for the first time. Parent hedge fund High-Flyer Capital Management previously self-funded the startup. The potential deal underscores the escalating competition among Chinese tech leaders for dominance in foundational AI models.
DeepSeek gained global attention for developing powerful AI models at a fraction of the cost of Western counterparts. Tencent and Alibaba previously invested in other major Chinese AI startups. This move would grant both companies a stake in the cost-efficient model developer.