Tencent, Alibaba in talks to join DeepSeek’s first funding round

```json { "title": "Tencent and Alibaba in Talks to Back DeepSeek at $20B+", "metaDescription": "Tencent and Alibaba are in talks to join DeepSeek's first-ever funding round, targeting a valuation exceeding $20 billion, Bloomberg reported April 22, 2026.", "content": "<h2>Tencent and Alibaba in Talks to Back DeepSeek in First Funding Round at $20 Billion-Plus Valuation</h2>\n\n<p>Two of China's largest technology conglomerates are circling DeepSeek. According to reporting by Bloomberg and The Information on April 22, 2026, Tencent Holdings Ltd. and Alibaba Group Holding Ltd. are in discussions to participate in the first-ever external funding round for DeepSeek, the Hangzhou-based artificial intelligence startup that rattled global markets with its low-cost AI models in early 2025. The talks place DeepSeek's targeted valuation at more than $20 billion — double an earlier target of at least $10 billion reported just the previous week — marking what Bloomberg called a milestone for China's artificial intelligence sector.</p>\n\n<p>No deal has been finalized. Both Bloomberg and The Information, which cited four people with knowledge of the conversations, emphasized that talks remain fluid and there is no guarantee a transaction will close, or at what valuation it might proceed.</p>\n\n<h2>A Valuation That Doubled in Days</h2>\n\n<p>The speed at which DeepSeek's valuation target has escalated is striking. The Information initially reported that DeepSeek had begun exploring outside capital, targeting at least $300 million at a valuation of at least $10 billion. Within days, that figure had reportedly risen to more than $20 billion, according to four people familiar with the talks cited by The Information.</p>\n\n<p>Bloomberg reported that negotiators are benchmarking DeepSeek's valuation against publicly traded rival MiniMax Group Inc., which is currently valued at around $40 billion. That context puts DeepSeek's $20 billion-plus target at roughly half MiniMax's market value — though DeepSeek remains a private company with no conventional revenue model, given that its consumer chatbot is free and its core models are open-source.</p>\n\n<p>Competitor Moonshot AI is separately seeking an $18 billion valuation in its own new funding round, slightly below DeepSeek's current target, according to PYMNTS citing The Information. The broader Chinese AI funding landscape has shifted rapidly: MiniMax and Zhipu both went public in Hong Kong in January at valuations below $10 billion but have since climbed to $30 billion-plus and $50 billion-plus respectively, according to the same reporting.</p>\n\n<p>One specific proposal under discussion stands out: Bloomberg reported that Tencent has proposed acquiring as much as a 20% stake in DeepSeek as part of the round. However, a person familiar with the matter told Bloomberg that DeepSeek is not keen on ceding such a large portion of control. Alibaba is also involved in talks, though the details of its proposal remain unclear. Representatives for DeepSeek, Alibaba, and Tencent did not respond to Bloomberg's requests for comment.</p>\n\n<p>A source close to the matter, cited by BigGo Finance via The Paper, denied the rumors of Tencent and Alibaba investment talks — though neither company had officially confirmed or denied the reports as of press time. Alibaba's stock ticked up about 2% on the news, according to Crypto Briefing.</p>\n\n<h2>Who Is DeepSeek — and Why Is This Round Significant?</h2>\n\n<p>DeepSeek was founded in July 2023 by Liang Wenfeng, who also serves as its CEO. Liang previously co-founded Zhejiang High-Flyer Asset Management — a quantitative hedge fund — alongside two Zhejiang University classmates in February 2016. High-Flyer has been DeepSeek's sole financial backer since the startup's inception. High-Flyer Quant, co-owned by Liang, recorded a return of 56.6% in 2025, ranking second among China's 10 top-performing large hedge-fund firms, according to the South China Morning Post.</p>\n\n<p>DeepSeek drew global attention in January 2025 when it released its R1 reasoning model. Built using 2,048 Nvidia H800 GPUs at a reported cost of $5.6 million, R1 achieved performance levels comparable to leading U.S. models at a fraction of the cost that Western competitors had been spending. The company also claims it trained its V3 model for approximately $6 million — compared to roughly $100 million for OpenAI's GPT-4 in 2023 — and using about one-tenth the computing power consumed by Meta's comparable model, Llama 3.1.</p>\n\n<p>The market reaction to R1's release was severe. Nvidia lost nearly $600 billion in market capitalization following the announcement, with its stock falling approximately 16.9% from the Friday close to the Monday close, according to TechCrunch. In total, more than $1 trillion in U.S. market capitalization was erased. By January 27, 2025, DeepSeek's app had surpassed ChatGPT to become the number-one free app on the United States iOS App Store.</p>\n\n<p>The fact that DeepSeek is now seeking outside funding for the first time represents a notable strategic shift. The company has previously declined multiple investment offers from leading Chinese venture firms and technology groups. Liang has historically expressed skepticism toward investors seeking time-bound financial returns.</p>\n\n<p>In a July 2024 interview republished by Fortune and Yahoo Finance, Liang stated: <em>"Our goal isn't quick profits but advancing the technological frontier to drive ecosystem growth."</em> In the same interview, he added: <em>"What we lack isn't capital but confidence and the ability to organize high-caliber talent for effective innovation."</em></p>\n\n<p>That posture appears to be evolving. Rising infrastructure costs — particularly around inference at scale and the challenges of transitioning away from Nvidia's CUDA-based systems — appear to be driving the company's openness to external capital. According to BigGo Finance, citing 36Kr, DeepSeek's planned release of its V4 model in February 2026 has been repeatedly delayed as the company works to migrate from Nvidia's CUDA framework to Huawei's Ascend chips, a shift likely driven in part by U.S. chip export restrictions.</p>\n\n<h2>Strategic Stakes for Tencent and Alibaba</h2>\n\n<p>Both Tencent and Alibaba have strong strategic incentives to back DeepSeek, beyond simple financial return. Both companies are major cloud computing providers in China, and both are already investors in DeepSeek competitor MiniMax. Securing a stake in DeepSeek — widely regarded as China's most technically credible AI lab — would give either conglomerate a significant edge in the race to integrate frontier AI into cloud services, enterprise software, and consumer products.</p>\n\n<p>Tencent, for its part, recently announced it would double its AI investments to more than 36 billion yuan (approximately $5.2 billion) in 2026, according to IndexBox citing Bloomberg. A DeepSeek stake would represent a high-profile deployment of that capital.</p>\n\n<p>DeepSeek has also signaled product expansion ambitions. In March 2026, the company posted more than a dozen job listings for agent-related roles, according to Bloomberg, suggesting it is building toward agentic AI capabilities — systems that can autonomously complete multi-step tasks — which is widely seen as the next competitive frontier in AI.</p>\n\n<h2>Valuing an Open-Source AI Lab Is Complicated</h2>\n\n<p>One of the core challenges in this funding round is the question of how to value a company whose flagship products are free. DeepSeek's models are open-source and its chatbot is free for consumers to use, which has led to debate about how it should be valued, according to PYMNTS citing The Information.</p>\n\n<p>Conventional startup valuation frameworks — typically anchored in revenue multiples or user monetization — apply awkwardly here. The MiniMax benchmark being used in talks is itself a publicly traded company with a distinct business model. Whether DeepSeek's $20 billion-plus target reflects a sustainable commercial reality or investor enthusiasm for a strategically critical asset remains an open question that the market has not yet definitively answered.</p>\n\n<h2>Expert Reaction: DeepSeek's Market Impact Already Documented</h2>\n\n<p>The significance of DeepSeek's R1 release last year — and its implications for how the industry thinks about AI development costs — has been widely noted by analysts. Haritha Khandabattu, Senior Director Analyst at Gartner, described the moment in an interview with CNBC: <em>"January [DeepSeek] (R1) caused a broad, visible repricing because it changed global beliefs about frontier-model cost curves and China's competitiveness."</em></p>\n\n<p>That repricing now appears to be extending into private markets, where investors are reassessing how much DeepSeek's technical capabilities — and its geopolitical significance as a Chinese AI champion — are worth.</p>\n\n<h2>What Happens Next</h2>\n\n<p>As of April 24, 2026, no deal has been announced and the terms remain unresolved. DeepSeek's resistance to Tencent's reported 20% stake proposal suggests the company intends to preserve meaningful autonomy over its direction — consistent with Liang's previously stated priorities. Whether either Tencent or Alibaba will accept a smaller stake, or whether other investors will join the round, remains to be seen.</p>\n\n<p>The valuation trajectory — from $10 billion to $20 billion-plus in under two weeks — reflects how rapidly investor sentiment around Chinese AI assets is moving. But talks described as "in flux" by Bloomberg could still fall apart, restructure, or proceed at a different valuation than currently targeted. DeepSeek has not publicly commented on the reports.</p>\n\n<p>What is clear is that DeepSeek, once content to operate entirely within the capital structure of a single hedge fund, is now at the center of one of the most closely watched deals in the global AI industry.</p>\n\n<p>For more tech news, visit our <a href=\"/news\">news section</a>.</p>\n\n<h2>Why This Matters for Your Productivity and Decision-Making</h2>\n\n<p>The race to build and fund frontier AI isn't just a story about venture capital — it directly shapes the tools that professionals, teams, and individuals will use to work, think, and stay healthy in the years ahead. As AI capabilities grow and consolidate among a handful of well-backed players, understanding which companies are gaining scale and resources helps you make smarter decisions about which platforms and tools to trust with your most important workflows. Staying informed is itself a competitive advantage. <a href=\"/#waitlist\">Join the Moccet waitlist to stay ahead of the curve.</a></p>", "excerpt": "Tencent Holdings and Alibaba Group are in talks to join DeepSeek's first-ever external funding round, targeting a valuation of more than $20 billion, according to Bloomberg and The Information reporting from April 22, 2026. The targeted figure has doubled in less than two weeks, reflecting intense investor interest in the Hangzhou-based AI lab. No deal has been finalized, and talks remain fluid.", "keywords": ["DeepSeek funding round", "Tencent Alibaba DeepSeek investment", "DeepSeek valuation 2026", "Chinese AI startups", "Liang Wenfeng DeepSeek"], "slug": "tencent-alibaba-deepseek-funding-round-20-billion-valuation" } ```