DeepSeek is now chasing a valuation above $20 billion as Tencent Holdings and Alibaba Group discuss possible investments in the Chinese AI startup.

The Information reported that on Wednesday, citing four people who knew about the talks. DeepSeek, which is owned by hedge fund High-Flyer Capital Management, had only just started talking to outside investors for the first time.

By Friday, the reported target was at least $300 million at a valuation of at least $10 billion. Now the asking price has climbed fast as interest builds around DeepSeek.

The talks are still going on, so the final number could still change. The amount DeepSeek wants to raise could also change. Some U.S. venture capital companies may be cautious because DeepSeek is a Chinese startup.

Earlier this year, Cryptopolitan reported that DeepSeek did not show U.S. chipmakers its flagship model for performance tuning. We also reported that one of DeepSeek’s newer models was trained on Nvidia’s most advanced banned chip.

Back in January 2025, the first big DeepSeek release helped trigger a global tech selloff and pushed Chinese rivals to upgrade their own models.

Tencent and Alibaba push DeepSeek into a bigger money race

Meanwhile, on the Dwarkesh Podcast on Wednesday, Nvidia chief executive Jensen Huang said it would be “a horrible outcome” for the United States if DeepSeek optimized its new AI models to run on Huawei chips instead of American hardware.

Jensen said, “If future AI models are optimised in a very different way than the American tech stack,” and as “AI diffuses out into the rest of the world” with Chinese standards and technology, China “will become superior to” the United States.

On chip performance alone, Huawei still trails Nvidia. The Ascend 910C, which came before the 950PR, delivers about 60% of the inference performance of Nvidia’s H100. That H100 is already two generations behind Nvidia’s current best chip.

American chips are about five times more powerful than Chinese rivals today, and that gap is expected to widen to 17 times by 2027. Huawei is targeting 750,000 AI chip shipments in 2026, but its total production amounts to only about 3% to 5% of Nvidia’s combined computing power.

“A lot of work has to go into it to change. But go to the global south, go to the Middle East. Coming out of the box, if all of the AI models run best on somebody else’s tech stack, you’ve got to be arguing some ridiculous claim right now that that’s a good thing for the United States,” said Jensen.

AI funding surges as DeepSeek and Vast Data chase bigger checks

Jensen said his real concern is not just the gap in chip strength. He said China could still catch up in AI because it has “abundant energy” and a “large pool of AI researchers.”

If DeepSeek V4 runs well on Ascend chips, that would give China another route in AI development that does not depend on Nvidia across the supply chain.

That same funding rush showed up elsewhere on Wednesday. Vast Data announced a $1 billion funding round at a $30 billion valuation, and Nvidia was one of the backers.

The company says it supports projects that power millions of GPUs. Its customers include CoreWeave, Mistral, the U.S. Air Force, and Cursor. The new round more than tripled Vast’s $9.1 billion valuation from 2023. Drive Capital and Access Industries led the Series F. Fidelity Management and Research Co., NEA, and Nvidia also joined.

The financing included both primary and secondary capital. Dealroom said AI companies globally have already raised $280.5 billion this year, with more than $170 billion going to OpenAI, Anthropic, and xAI.

Chris Olsen of Drive Capital said, “The scale and speed of AI adoption are creating a new class of infrastructure company.” Chris added, “VAST is emerging as the clear leader in this category, with the architecture and momentum to support the world’s most demanding AI environments.”

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