By PYMNTS | October 22, 2026
Chinese artificial intelligence (AI) startup DeepSeek has raised $15 billion in its second private funding round and is accelerating plans for a Shanghai listing in early 2027, potentially reaching public markets before OpenAI.
The financing nearly doubled its original target amid strong investor demand, The Wall Street Journal reported Thursday (Oct. 22), citing people familiar with the matter.
DeepSeek was valued at approximately $74 billion before the round closed. The financing comes as investors question whether AI companies can turn rising infrastructure spending into sustainable profits. DeepSeek founder Liang Wenfeng told investors in September that the company’s annualized revenue run rate had reached $1 billion, according to the Journal.
That represents more than double the $400 million to $500 million annualized revenue reported in July, driven largely by cloud-based access to its models through application programming interfaces, PYMNTS reported.
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DeepSeek reportedly maintained gross margins of 70% to 80% on access to its V4 flagship model, despite charging less than U.S. competitors.
The company has also adjusted pricing to capture more revenue. In August, DeepSeek introduced peak-hour pricing that increased rates for its flagship models by roughly fourfold, while remaining cheaper than major rivals, PYMNTS reported.
However, annualized revenue does not establish profitability, particularly as DeepSeek continues investing in computing infrastructure.
Tencent and battery manufacturer Contemporary Amperex Technology participated in the financing alongside existing investors Monolith Management and Shixiang, according to the Journal. New backers included semiconductor-focused private equity firm Stony Creek Capital, Lenovo-backed Legend Capital and automaker Geely.
DeepSeek is expanding domestic computing infrastructure to reduce dependence on foreign chips. Although it continues using Nvidia processors for its most complex AI training, the company is working with Huawei to shift more training workloads onto Chinese chips. The strategy could reduce reliance on U.S. suppliers, although its financial benefits remain unquantified.
DeepSeek has hired state-owned investment bank Citic Securities to advise on its IPO and recruited former venture capitalist Yan Wentao as chief financial officer in September, the Journal reported. An IPO listing would bring greater scrutiny of DeepSeek’s revenue, margins and infrastructure spending, testing whether its lower-cost AI strategy can generate sustainable profits and justify its valuation.
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