DeepSeek Pauses $74B Fundraising Round After Leaked Investor Transcript Goes Viral

A leaked transcript of founder Liang Wenfeng's candid remarks about the US-China compute gap has halted DeepSeek's second funding round, freezing a deal that valued the AI lab at roughly $74 billion.

A leaked transcript has accomplished what chip sanctions could not: bringing DeepSeek's fundraising to a halt. The Hangzhou AI lab has told prospective investors it is suspending its second funding round, days after remarks attributed to founder Liang Wenfeng about the US-China AI compute gap circulated widely online, according to CyberKendra, which cited people familiar with the matter.

The numbers are significant. DeepSeek was seeking at least 10 billion yuan (~$1.4 billion USD) in follow-on capital at a pre-money valuation of roughly 480 billion yuan — approximately $74 billion, up from about $50 billion in its first round. That maiden round closed in June, raised around $7 billion, and drew in Tencent and battery giant CATL.

What triggered the pause was a four-hour investor meeting held on May 20. A transcript surfaced online this week; WeChat links carrying it were pulled shortly afterward. In the transcript, Liang reportedly framed China's AI disadvantage as a resource problem rather than a talent gap: "The biggest gap between us and the US is in resources." He told investors he needed 200,000 Huawei Ascend 950 chips to train a frontier model but received only 16,000, adding that "Huawei's problem is still insufficient capacity" and that the crunch could last at least three years.

Liang also floated the possibility of narrowing the gap with US labs to three to six months using a fraction of their computing resources — a claim that drew both skepticism and intrigue on Hacker News, where the story garnered over 100 points and dozens of comments.

The transcript's authenticity has not been verified by Bloomberg or Reuters, and DeepSeek could not be reached for comment. But the practical effect is already in motion: would-be backers were verbally informed they would not be signing investment agreements in the coming days, though the company may resume the process later. DeepSeek has separately begun preparing for an IPO, with early deliberations pointing to Shanghai's STAR Market.

Sources: CyberKendra, Hacker News