A leaked transcript has done what chip sanctions could not: bring DeepSeek's fundraising to a halt.
The Hangzhou AI lab has told prospective investors in its second fundraising round that it is suspending the deal, people familiar with the matter told Bloomberg on Saturday, days after remarks attributed to founder Liang Wenfeng about US-China AI competition circulated widely online.
Would-be backers were verbally informed they would not be signing investment agreements in the coming days as expected, though the company may resume the process later.
The money involved is not small. DeepSeek was seeking at least 10 billion yuan in follow-on capital at a pre-money valuation (the company's worth before new money lands) of at least 480 billion yuan — roughly $74 billion, up from about $50 billion in its first round, Bloomberg reported. That maiden round closed in June, raised around $7 billion, and drew in Tencent and battery giant CATL.
What appears to have triggered the pause is a four-hour investor meeting held on May 20. A transcript surfaced online this week; WeChat links carrying it were pulled shortly afterward. Tencent's technology outlet published a 118-item version covering AGI strategy, chip supply, pricing, and retention. In it, Liang reportedly framed China's disadvantage as an arithmetic problem rather than a talent one: "The biggest gap between us and the US is in resources."
The specifics were unusually candid. Liang is said to have told investors he needed 200,000 Huawei 950 chips to train a frontier model but received 16,000, adding that "Huawei's problem is still insufficient capacity" and expecting the crunch to last at least three years. He also floated narrowing the gap with US labs to three to six months using a fraction of their computing.
Neither Bloomberg nor Reuters has verified the transcript's authenticity, and DeepSeek could not be reached outside business hours.
For anyone tracking the AI capital cycle, the practical takeaway is timing. DeepSeek has separately begun preparing for an IPO, and Reuters reported last week that early deliberations point to Shanghai's STAR Market. A paused private round does not kill that path — but it does mean the next real disclosure may arrive as a prospectus, not a leak.