DeepSeek reportedly halts second funding round of at least 10 billion yuan

According to Bloomberg, DeepSeek has orally notified some potential investors that the investment agreements expected to be signed in the coming days will not proceed as planned. The second funding round sought to raise at least 10 billion yuan (about $1.4 billion) at a pre-money valuation of at least 480 billion yuan ($71 billion), up about 40% from its first round valuation of around $50 billion. This would have been one of the largest private tech financing deals in China. The pause comes just days after a leaked internal memo caused concerns at DeepSeek. The company had only completed its first external funding round weeks ago, raising about 50 billion yuan (about $7.4 billion) in June 2026, with contributions from founder Liang Wenfeng (about 20 billion yuan), Tencent (about 10 billion yuan), CATL (about 5 billion yuan), and the National AI Industry Investment Fund. DeepSeek, previously financed by Liang's High-Flyer Quant, seeks additional funds for business expansion including computing power. The pause is not due to lack of investor demand or valuation disagreements, and the deal may restart in the future. The suspension raises questions about when the round will resume, whether DeepSeek will change its approach to investor engagement, and whether the IPO plans (potentially in 2026) will be affected.