Tencent and Alibaba are reportedly in talks to invest in AI startup DeepSeek at a valuation exceeding $20 billion. It highlights an intensifying competition among tech giants in the artificial intelligence sector. A successful investment at this scale would position DeepSeek as one of the world's most valuable private AI companies.
Chinese technology giants Tencent Holdings and Alibaba Group are in discussions to invest in the AI startup DeepSeek, according to a report from The Information. On last Friday (April 17, 2026), The Information reported that DeepSeek had begun talks to raise outside capital for the first time. That initial report mentioned the funding of $300 million at a valuation of at least $10 billion. The increase in the reported valuation showcases the intense investor appetite for AI ventures.
DeepSeek is owned by the Chinese hedge fund High-Flyer Capital Management. The report further stated that DeepSeek is seeking to raise capital at this substantial valuation after initial discussions with prospective investors generated significant interest.
The potential investment by Tencent and Alibaba highlights the strategic importance. As leaders in China's tech ecosystem, their involvement would provide DeepSeek with vast cloud computing resources, user data, and commercial application channels. These will play an important role for scaling AI models.
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The participation of Tencent and Alibaba, seen as rivals, in the same funding round would be a notable event. It suggests a shared priority in nurturing a strong domestic AI contender.
The report cautions that talks are still underway, and both the final valuation and the amount of capital to be raised could change. This potential fundraise exemplifies the huge financial demands of the current AI arms race, particularly for developing advanced reasoning and agentic AI systems that go beyond simple text generation.