One month after completing a $7 billion, $52 billion post-money round, Chinese AI startup DeepSeek is reportedly in negotiations to seek a fresh round of investment at a $71 billion pre-money valuation.
In order to strengthen its competitive position, this quick fundraising campaign seeks to raise money for infrastructure, particularly for the construction of proprietary data centres and the purchase of specialised AI processors.
According to a report by Financial Times, the company had initial discussions this week with potential investors about launching a second round of funding that would put the company's valuation at roughly $71 billion before the sale.
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Around the end of May, DeepSeek, the most well-known AI firm in China, concluded its first round of funding, raising almost $7 billion at a valuation of $52 billion, including the cash raised, the FT reported.
The startup became China's national AI champion and gained international recognition early last year when its V3 and R1 models challenged American presumptions about China's AI capabilities and received significant plaudits in Silicon Valley.
Earlier this month, Reuters revealed that DeepSeek is creating its own AI chip, a move that may lessen its dependency on Nvidia and Huawei CPUs, which it has used to train and operate its widely used models.
DeepSeek is creating its own in-house AI chips designed especially for inference in order to lessen dependency on constrained foreign hardware. This builds on the company's recent move to use Huawei's Ascend CPUs and is part of a larger worldwide trend.
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According to the Reuters report, the chip is not intended for training new models but rather for inference, the stage of AI computing when a trained model delivers responses for users.
If DeepSeek's move into semiconductor creation is successful, it would represent a significant strategic change for a business that is largely regarded in China as the nation's AI champion and might complicate matters for Chinese tech behemoth Huawei.
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