Deepseek founder Liang Wenfeng is not in a hurry to get investment from outsiders, the WSJ reported Monday.
Deepseek is currently one of the hottest AI startups in the world after a Chinese AI company swept Silicon Valley with its latest model earlier this year.
Unlike the counterpart of Deepseek’s AI model provider, who regularly announces mega-rounds filled with well-known investors, Liang has not announced his funding despite the interests of many VCs. Rumors about the expected investors even fueled (unfounded) gatherings in some Chinese stocks.
The founders of Deepseek don’t want to lose control
An analysis of Chinese company records conducted by TechCrunch shows that Deepseek is 84% owned by Liang. The rest of the startup is owned by an individual affiliated with Liang’s hedge fund High-Flyer.
That is, unlike most startups that require external capital and therefore are used at least for external influences, DeepSeek is essentially a one-man show. And Liang doesn’t appreciate VCS’s opinion most.
When Liang was trying to raise capital in the past, he was postponed to the VCS focus on rapidly monetizing AI, in contrast to basic research, he said in a 2023 interview with Chinese media.
So, one of the big reasons why Liang doesn’t say yes to investors who knock his door down is that he doesn’t want to share control over his company, WSJ reported.
Deepseek does not require external funding
Most startups need capital from the start. But Deepseek is a unique beast. Liang was able to fund Deepseek through High-Flyer’s profits, reducing the need for external investments.
“Money wasn’t a problem for us. The ban on advanced chip shipping is the issue,” Liang said in 2023.
Investors may deepen trust and privacy concerns
As a Chinese company, Deepseek operates under strict Chinese laws that grant wide access to the government’s data.
Concerns about this have prompted Deepseek Bans from the growing government and some private companies.
These bans could be even worse if Deepseek accepts funds from Chinese investors facing similar issues.
The US government has a history of authorizing Chinese high-tech companies that say they are close to the Chinese government, such as Telecom giant Huaway and popular drone maker DJI.
It has not stopped entities in China’s provinces from approaching deepshakes for investment, information reported, but deepseek has not accepted anything.
Why can all this change?
However, this does not mean that Deepseek does not develop external capital.
Earlier this month, Deepseek announced its (mostly theoretical) profit margins for the first time, indicating the move to monetization.
To catch up with other AI heavyweights, DeepSeek likely needs to access the biggest AI chips in 2023, Liang said. These chips are expensive and are significantly limited in China due to US export controls.
Deepseek’s ability to become self-funded may also be declining. High-Flyer has been on track in the past, but some of its flagship funds have been performing poorly since 2022, according to WSJ.
It also doesn’t help that the Chinese government has been cracking down on quantum funds like high airships since 2024.
Multiple news reports show that specific names are barely circulating, but they have already attracted interest from Tencent and Alibaba.
Deepseek did not immediately respond to requests for comment.
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