DeepSeek, the Chinese AI startup that rattled Silicon Valley last year, is moving closer to a potential listing on Shanghai’s technology-focused STAR Market.
The Hangzhou-based AI startup has engaged CITIC Securities to prepare for a potential initial public offering on the Shanghai Stock Exchange’s STAR Market, according to Reuters, citing two people familiar with the matter.
The company aims to begin the IPO process this year, although key details including the amount it could raise, the timing of the offering and its eventual valuation have not been decided. For companies seeking a mainland Chinese listing, securities firms typically conduct pre-listing tutoring before an application is submitted. That makes the appointment an indication that DeepSeek’s IPO plans are moving beyond early discussions.
Funding a costly AI race
The potential listing comes as DeepSeek seeks additional capital for computing infrastructure, model development, and the recruitment and retention of researchers.
Reuters reported in July that the company was pursuing a funding round that could value it at about 500 billion yuan ($75 billion). DeepSeek also raised about $7.4 billion in June at a post-money valuation above $50 billion, according to Reuters, citing sources and investor filings.
Founder Liang Wenfeng committed 20 billion yuan to that round, while Tencent and CATL invested 10 billion yuan and 5 billion yuan, respectively, Reuters reported.
The funding pressure reflects the economics of building frontier AI systems. More users require more computing capacity, while competition for engineers and researchers is pushing companies to offer stronger compensation. DeepSeek has also been losing talent to better-funded rivals, including ByteDance and Xiaomi, according to Reuters.
China’s AI IPO race
DeepSeek would not be the first Chinese AI model developer to seek public-market funding. Z.AI and MiniMax listed in Hong Kong earlier this year, while Moonshot AI has confidentially filed for a Hong Kong IPO.
The valuations being discussed also show a major gap with leading U.S. AI companies. Investors have suggested Anthropic could reach a valuation of up to $2 trillion in an IPO, while OpenAI could seek as much as $1 trillion.
What DeepSeek’s move could mean
For DeepSeek, an IPO could provide a more durable source of capital as AI development becomes increasingly expensive. It could also give the company another tool to compete for scarce technical talent without relying solely on private funding rounds.
But going public would bring its own pressure. A high valuation would create expectations for growth and financial performance at a company still spending heavily on infrastructure and research. DeepSeek’s ability to turn its technical reputation and growing market presence into sustainable revenue will therefore become increasingly important to investors.
That challenge is already visible in its business. DeepSeek raised API prices for its V4-Flash and V4-Pro models in August, with increases ranging from about 57% to more than 1,100%, depending on the model, token type and billing period. For channel partners and enterprise customers, the IPO process could provide greater visibility into whether DeepSeek can sustain its low-cost positioning while funding the infrastructure and talent needed to compete.
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