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.
DeepSeek hasn’t required outside funding — yet
Most startups need capital from investors from the start. But DeepSeek is a unique beast. Liang has been able to fund DeepSeek through High-Flyer’s profits, reducing his need for outside investment.
“Money has never been the problem for us; bans on shipments of advanced chips are the problem,” Liang said in 2023.
Investors could deepen trust and privacy concerns
As a Chinese company, DeepSeek operates under strict Chinese laws that grant its government broad data access.
Concerns over this have prompted DeepSeek bans from a rising number of governments and even some private companies.
Those bans could get even worse if DeepSeek accepts funding from a Chinese investor, who face similar issues.
The U.S. government has a history of sanctioning Chinese tech companies it says are close to the Chinese government, like telecom giant Huawei and popular drone maker DJI.
That hasn’t stopped some Chinese state entities from approaching DeepSeek for investment, The Information reported, although there’s no indication DeepSeek has accepted any.
Why this could all change
This doesn’t mean DeepSeek will never raise outside capital, though.
Earlier this month, DeepSeek announced a (largely theoretical) profit margin for the first time, signaling a shift toward monetization — something VCs value but that Liang previously dismissed.
To keep up with other AI heavyweights, DeepSeek will also likely need access to more and better AI chips — the biggest bottleneck on its development, Liang said in 2023. Those chips are expensive and heavily restricted in China due to U.S. export controls.
DeepSeek’s ability to be self-funding may also be fading. While High-Flyer has done well in the past, some of its flagship funds have underperformed since 2022, the WSJ reported.
It also doesn’t help that the Chinese government has been cracking down on quant funds like High-Flyer since 2024.
While few concrete names are circulating, DeepSeek has already drawn interest from Tencent and Alibaba, according to multiple news reports.
DeepSeek didn’t immediately respond to a request for comment.
