DeepSeek Pauses Second Funding Round Just Before Planned IPO

DeepSeek, the Chinese AI model maker that rattled the market in early 2025 with a cheap and highly capable model, has paused its second funding round just ahead of a planned stock market debut. The reason isn't investor demand, but frustration from founder Liang Wenfeng after a transcript of his private conversation with investors leaked online.

What triggered the decision

The immediate trigger was a transcript of a meeting between Liang Wenfeng and unnamed parties that began circulating on Chinese social media. According to Bloomberg, the DeepSeek founder reportedly spoke about the company's dependence on Nvidia chips and China's persistent lag behind the United States in AI development.

Bloomberg notes it hasn't independently verified the authenticity of those posts, but it was their reach, not their substance, that appears to have prompted Liang to halt talks with investors. The founder reportedly told some prospective backers verbally that he would not be signing investment agreements with them in the coming days.

Bloomberg hasn't verified the authenticity of those posts, which concerned a transcript of a meeting Liang held with unidentified parties - Bloomberg News

The money at stake

The figures involved show how fast DeepSeek's valuation climbed within a single year. The first round in June 2026 valued the company at around $50 billion. The second round, being prepared just weeks later, targeted a pre-money valuation of at least 480 billion yuan, or nearly $71 billion, a jump of almost half in a short span.

The first round alone had already pushed Liang Wenfeng's net worth from about $16.7 billion to $36 billion, making him the world's richest AI model builder, ahead of the heads of Anthropic and OpenAI. That fact alone fueled media interest in his remarks, which may have contributed to the leak and the buzz around the transcript.

IPO still on the table

Despite pausing funding talks, DeepSeek hasn't abandoned its stock market plans. The company has begun preliminary preparations to list on Shanghai's STAR Market, the US Nasdaq equivalent for tech companies, and has set an internal target of filing its IPO application before the end of the year.

Sources say talks with investors remain fluid and the company could resume the process at any time. It's unclear whether DeepSeek managed to notify all prospective investors of the pause, suggesting the decision was made quickly in response to unfolding events rather than as part of a planned strategy.

What it means for the market

The episode shows how sensitive a topic Chinese AI firms' dependence on American Nvidia chips, and comparisons with the US, remains. A public admission of the gap from the founder himself could undercut the narrative of Chinese technological sovereignty that Beijing promotes at the highest levels.

For investors and AI market watchers, the situation signals that even companies with valuations climbing at a dizzying pace can pause multi-billion-dollar deals for reputational rather than business reasons. For Polish companies and investors following the AI sector, it's further evidence that the US-China rivalry for AI dominance directly shapes capital decisions even at the most recognizable Chinese players.