On February 19, Beijing time, media outlets reported that DeepQuest, a subsidiary of DeepSeek, is exploring options for external funding.

Source: The Information. Note: This media outlet is highly reputable for its coverage of technology company developments.

The rationale behind DeepQuest's funding drive: To secure additional AI chips and servers to manage the surging demand from users and support model development.

Currently, institutions in discussions include Alibaba Group, China Investment Corporation, state sovereign wealth funds, the National Council for Social Security Fund, and other state-owned funds.

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Recently, there were reports that Alibaba had invested $1 billion in DeepQuest, valuing it at $10 billion, but both parties have denied these claims.

If DeepSeek pursues funding, it is anticipated that its valuation could potentially set new benchmarks in China's venture capital industry, both in terms of valuation and funding amount.

Globally, we can draw comparisons with the valuations of leading players like OpenAI and xAI:

1. Rumors suggest that OpenAI is seeking another $40 billion at a valuation of up to $340 billion, with SoftBank's Masayoshi Son negotiating to invest up to $25 billion.

2. Elon Musk's consortium plans to acquire OpenAI for $97.4 billion.

3. Bloomberg reported that Musk is considering assisting xAI in raising $10 billion at a valuation of $75 billion. The previous round of funding was a $6 billion Series C completed in December 2024, highlighting xAI's remarkable fundraising pace.

DeepSeek's valuation can be contextualized against these two competitors.

Regarding the demand for computing power, this will undoubtedly escalate into a fierce competition.

While DeepSeek has reduced the computational requirements for individual inferences, the increased number of concurrent demands necessitates more computing power.

Just today, xAI unveiled its massive model Grok3, utilizing an astonishing 200,000 GPUs!

This is also the reason why NVIDIA bounced back from a single-day 17% plunge, surpassing its pre-plunge levels.

However, if DeepSeek successfully secures external funding, it will provide a significant boost to domestic chips and servers. Additionally, it will continue to engage more enterprises and services at the application level.

DeepQuest, an AI startup under the quantitative giant QuantumBlack, is now in need of more funds for additional chips and servers. Executives from both DeepSeek and QuantumBlack are discussing whether financing is necessary and whether to shift focus from "primarily research-oriented" to "building a revenue-generating and ultimately profitable business".

This transition mirrors OpenAI's shift from a non-profit organization to a for-profit entity under Altman's leadership, with plans for a sale. This aspect has been challenging for Musk to accept. Initially ousted from the OpenAI board, Musk now also plans to acquire OpenAI.