Tencent and Alibaba in Talks to Invest in DeepSeek at Over $20B Valuation

Tencent and Alibaba are in talks to invest in DeepSeek, an AI startup, with a valuation of over $20 billion. This significant investment is a testament to the growing interest in AI technology.

Chinese tech giants Tencent Holdings and Alibaba Group are in advanced talks to invest in DeepSeek at a valuation exceeding $20 billion, according to a report from The Information. The investment would mark DeepSeek's first major outside funding — the AI startup has previously relied entirely on capital from its parent, quantitative hedge fund High-Flyer Capital Management, since its founding.

DeepSeek gained global attention earlier this year after demonstrating large language model capabilities competitive with leading Western systems at a fraction of the compute cost, putting pressure on NVDA Nvidia stock and reshaping assumptions about AI infrastructure economics. The $20 billion-plus valuation reflects how dramatically that visibility has changed investor appetite: the company had sought first-round funding at just $10 billion earlier in 2026 before interest from TCEHY Tencent and BABA Alibaba reset the terms.

Strategic interest from both platform giants underscores the intensifying race among Chinese internet leaders to secure influence over foundational AI capabilities. An investment would grant Tencent and Alibaba access to DeepSeek's research outputs and model weights, potentially accelerating their own AI product offerings in a domestic market where Baidu, ByteDance, and others are competing aggressively for enterprise and consumer AI supremacy.