DeepSeek, the Hangzhou-based AI startup, is seeking strategic investors to raise funds amid concerns over losing key researchers to rivals like ByteDance and Tencent. The company aims for a valuation exceeding $20bn, though discussions remain in early stages with only nominal capital expected—likely in the low hundreds of millions. This move comes as founder Liang Wenfeng, who previously funded DeepSeek via his quantitative trading firm, faces pressure to retain talent lured by competitors offering stock options and clearer valuations.

While rivals like Moonshot AI ($18bn) and MiniMax ($34bn) have secured significant funding, DeepSeek’s lack of a business model and opaque financials have deterred traditional investors. Instead, Liang is exploring alternatives like share buybacks or performance-based valuations. Despite losing a few high-profile researchers, including Guo Daya (R1 co-author) and Wang Bingxuan, the company emphasizes its research-focused culture, flexible work environment, and linear reporting structure as retention tools.

Analysts suggest strategic investors with cloud expertise or state-backed entities may step in, prioritizing AI innovation over immediate ROI.