The Chinese AI provider DeepSeek has more than doubled its annualized revenue run rate to over one billion dollars in just a few months. At the same time, a new funding round of approximately 7.5 billion dollars at a valuation of 75 billion dollars is expected to be completed by the end of October. Additionally, the company is preparing for an IPO in Shanghai through CITIC Securities.
Price Increases Drive Revenue Surge
Company CEO Liang Wenfeng recently communicated the revenue figure to investors, reports The Information citing sources familiar with the matter. Just a few months ago, the revenue run rate was less than 500 million dollars. The reason for the surge is price increases for API access last month by a factor of 2.3 to 4.5.
Customers have not significantly churned despite the higher prices, according to Liang. DeepSeek continues to position itself as one of the more affordable offerings among the major AI providers, despite the release of the successor model DeepSeek-V4.1-Flash in early September with improved test results. More than 70 percent of computing capacity continues to flow into training new models, with less than 30 percent going into the ongoing operation of existing models. The revenue figure itself is independently unverified, as DeepSeek, being a private company, does not publish audited annual financial statements, and the figure comes solely from an investor briefing. Reliable, externally audited business figures for Chinese AI startups remain the exception, unlike publicly listed US competitors with regular quarterly reporting obligations.
Funding Round Expected to Close by End of October
The current round of 50 billion yuan follows DeepSeek’s first external financing. The company had already raised around 50 billion yuan, approximately 7.4 billion dollars, at a valuation of over 50 billion dollars in the summer. The largest individual investor at that time was CEO Liang Wenfeng himself with 20 billion yuan, followed by Tencent with 10 billion yuan and battery manufacturer CATL with 5 billion yuan. NetEase, JD.com, and IDG Capital each contributed 3 billion yuan, while China’s state AI investment fund added 1 billion yuan.
The target valuation has since increased multiple times: in July, DeepSeek initially aimed for $70 billion, in August for $74 billion. With now 500 billion yuan, approximately 75 billion dollars, and a target closing by the end of October, the round appears to be taking concrete shape after having paused temporarily in July. The fresh capital is intended primarily to finance the expansion of computing infrastructure, the further development of proprietary models, and the retention of specialized personnel.
Advisor CITIC Securities Prepares IPO
Regardless of the funding round, DeepSeek has reportedly engaged CITIC Securities, according to Reuters. They are to prepare for a listing on the Shanghai STAR Market – the same market segment where the robotics manufacturer Unitree debuted in August. The process is expected to begin later this year, but the timing, volume, and target valuation of the actual IPO have not yet been determined.
An IPO is also intended to help DeepSeek establish a compensation structure that would retain key engineers and researchers, according to Reuters. The company has recently seen departures to competitors like ByteDance and Xiaomi. In China, companies must first engage a securities firm for application preparation before a domestic listing – the mandate to CITIC is therefore seen as a concrete step towards an IPO.
With a target valuation of 75 billion dollars, DeepSeek remains significantly behind the ambitions of its US competitors. Anthropic reportedly aims for around two trillion dollars, while OpenAI targets about one trillion dollars. It will be crucial whether DeepSeek actually completes the targeted funding round by the end of October this time – the previous target had already shifted twice between July and August.
