Tencent and Alibaba in Talks to Back DeepSeek's First-Ever Funding Round at $20B+ Valuation (April 2026)

Chinese AI lab DeepSeek is in talks to raise its first-ever external funding round at a valuation of more than $20 billion, with both Tencent and Alibaba circling for stakes, according to a report from Bloomberg citing The Information on April 22, 2026. The valuation has roughly doubled from a $10 billion-plus target reported just a week earlier, after investor demand surged in under 48 hours.

What Happened

DeepSeek — the Hangzhou-based lab funded since inception by founder Liang Wenfeng's quantitative hedge fund High-Flyer — had been reported on April 17, 2026 as seeking at least $300 million at a $10 billion floor. Five days later, multiple outlets including The Information, Reuters via Yahoo Finance and Tech Startups reported the target had jumped past $20 billion as Tencent and Alibaba entered talks.

Tencent has proposed taking as much as a 20% stake, according to The Information — a level DeepSeek is reportedly reluctant to grant, citing concerns about ceding control. Alibaba is also at the table, though the size and structure of its proposal have not been disclosed. The talks are described as fluid; no terms, lead investor or close date have been finalised, and none of the three companies has commented publicly.

The funding-round news lands in the same week DeepSeek released its V4-Pro (1.6T-parameter MoE) and V4-Flash (284B) models on Huawei Ascend hardware on April 24, 2026, fueling another spike in investor and developer attention.

Key Details

• Valuation: More than $20 billion — doubled from the reported ~$10 billion floor in five days.
• Round size: At least $300 million per the original April 17 reporting; final size could climb with the higher valuation.
• Lead investors in talks: Tencent (proposing up to 20%) and Alibaba.
• Funder of record: Until now, 100% funded by founder Liang Wenfeng via High-Flyer — this would be the company's first outside money.
• Stated use of capital: Per The Information, primarily employee retention and equity incentives, as Chinese and U.S. AI rivals aggressively poach DeepSeek staff.
• Benchmark valuation: Roughly half of MiniMax's ~$40 billion mark, and well below frontier-lab peers like Anthropic ($350B) and Anysphere ($60B option).

What Developers and Users Are Saying

Reaction on Hacker News and r/LocalLLaMA has been a mix of admiration and caution. Top-voted comments on the DeepSeek-V4 Hacker News thread point out that DeepSeek's pre-funding economics — reportedly only ~$5.6M to train the original V3 model — were the entire pitch, and worry that a $20B valuation pulls the lab firmly into the same compute-hungry business model it once disrupted. Sentiment on Reddit, where DeepSeek-V4 has dominated r/LocalLLaMA all week, is more positive: most users frame the round as necessary defence against rivals poaching staff, and welcome any capital that keeps DeepSeek shipping open weights. Western investors are noticeably absent — both reported lead bidders are Chinese tech giants, reinforcing the bifurcation of the AI capital market.

What This Means for Developers

For now, nothing changes — DeepSeek-V4 weights are still freely available on Hugging Face under the same MIT-style licence, and the API remains the cheapest frontier-class option on the market at $0.27 / $1.10 per million input/output tokens. The longer-term question is whether outside capital, especially from Tencent or Alibaba, pushes DeepSeek toward closed weights or premium tiers in the way OpenAI evolved post-Microsoft. Liang has historically resisted that trajectory; the reported insistence on capping any single investor's stake suggests he intends to keep doing so. Developers building on DeepSeek should still plan a fallback — the comparable open-weight options today are Qwen 3, Llama 4 and Mistral Large — but there is no immediate disruption signaled.

What's Next

Watch for an official DeepSeek announcement — the company has not commented on the talks. The Information reported the round could close in the coming weeks. Two signals to track: whether Tencent secures a board seat (a strong indicator of strategic alignment versus pure financial backing), and whether U.S. or other non-Chinese investors are ultimately invited in, which would have export-control implications under current U.S. rules on outbound investment to Chinese AI firms. DeepSeek-V4's full release (post-preview) is also expected within weeks, per the company's release notes.

Sources

• Bloomberg — primary report citing The Information, April 22, 2026.
• The Information — original scoop with the 20% Tencent stake detail.
• Tech Startups — April 22 summary including the 48-hour valuation jump.
• TipRanks — details on talent-retention as the stated use of capital.
• Hacker News — DeepSeek-V4 discussion — community sentiment thread.
• Tech Startups (April 17) — original $10B / $300M target before valuation doubled.