AI Industry News: DeepSeek Reportedly Raises RMB 105.5 Billion in Its Second Round, With Xiaohongshu Among Investors

Two Sheep Co., Ltd. summarizes major developments in the AI industry based on public information such as company announcements and media reports. This article covers the second funding round of Chinese AI company DeepSeek: how the reports unfolded, the investors named, an overview of DeepSeek, and developments around its compute resources. Everything about the round is based on media reports; DeepSeek has not made an official announcement (as of November 3, 2026).

Key Points

• As of November 3, 2026, DeepSeek has not officially announced the second round, and we found no announcement from Xiaohongshu either. All funding and investment amounts come from media reports
• The Information reported RMB 105.5 billion from nearly 30 investors and a valuation of more than RMB 615.5 billion. The 21st Century Business Herald called it a post-money valuation
• Tencent reportedly put in RMB 10 billion, CATL and its chairman Zeng Yuqun RMB 10 billion combined, and seven companies including Xiaohongshu, Meituan and vivo RMB 1–3 billion each
• According to the 21st Century Business Herald, state-backed investors provided 27% of this round, up from 2% in the first round. Chipmakers CXMT and SMIC are also among the investors named
• In April, DeepSeek cited constraints in high-end compute capacity. It has not disclosed how the funds will be used

1. How the Reports Unfolded

The main reports on DeepSeek's fundraising are listed below by date (Japan time). All of them are media reports; DeepSeek has not made an official announcement.

First Round (June 2026)

• June 16 The Information (as summarized by Trivium China and Newsquawk): DeepSeek closed its first external funding round, raising more than $7 billion at a valuation of more than $50 billion. Liang Wenfeng reportedly led the round with about RMB 20 billion
• Breakdown (reported October 30) According to the 21st Century Business Herald, the first round raised about RMB 50 billion: Liang Wenfeng RMB 20 billion, Tencent RMB 10 billion, the CATL group RMB 5 billion, NetEase, JD.com, Monolith and IDG Capital RMB 3 billion each, and Loyal Valley Capital and Shixiang RMB 1.5 billion each
• Deal structure According to the same newspaper, outside investors other than the National AI Industry Investment Fund invested through a limited partnership (LP) managed by Liang, with no voting rights and a five-year lock-up. The fund invested RMB 1 billion directly, holds voting rights and is not subject to a lock-up

Second Round (reports from August 2026)

• August 5 Hong Kong newspaper The Standard, citing mainland media, reported that DeepSeek had resumed its second round, targeting RMB 50 billion at a pre-money valuation of about RMB 500 billion. Bloomberg had earlier reported that the deal was suspended, partly because Liang was frustrated by online reports on comments he made to investors during the first round
• October 6 Reuters, citing Bloomberg, reported that DeepSeek was close to securing at least RMB 80 billion (about $11.93 billion), with CATL and Tencent among the investors committing the largest amounts. Reuters said it could not immediately verify the report
• October 13 Caijing magazine, citing several people involved in the deal, reported that the planned size had grown from RMB 50 billion to about RMB 100 billion, with proposed amounts split roughly half and half between new and existing shareholders, and that the pre-money valuation remained about RMB 500 billion. Completion was expected "soon," with no date given. No comment from DeepSeek was reported
• October 22 Bloomberg first reported that DeepSeek had raised $15 billion (its headline used "raises"). On the same day, Reuters, citing four people with knowledge of the matter, reported that DeepSeek was wrapping up a raise of about RMB 100 billion (about $14.98 billion) at a pre-money valuation of RMB 500 billion, with more than 15 investors (according to one of the sources). CATL and Tencent were among the biggest investors, and Midea Group, Meituan, Geely and GigaDevice were named as new investors. Reuters said the terms and investor lineup could still change
• October 30 (October 29 US time) The Information reported that the second round raised RMB 105.5 billion from nearly 30 investors and valued the company at more than RMB 615.5 billion (its headline put the raise at $16 billion). It did not say whether the valuation was pre- or post-money. On the same day, the 21st Century Business Herald described RMB 615.5 billion (about $86 billion) as the post-money valuation and put the raise at about $15.8 billion. Xiaohongshu was named among the investors in these reports
• November 3 An article with a headline about Xiaohongshu's investment appeared on Pengpai Hao, the user-contributed creator platform of The Paper

2. Second-Round Investors Named in Reports

Based on NetEase Tech's report on The Information's article (October 30) and the 21st Century Business Herald, the main investors and amounts reported are listed below. None of these have been officially announced by the companies.

• Tencent: RMB 10 billion (the same as in the first round), for RMB 20 billion across both rounds
• CATL and chairman Zeng Yuqun: RMB 10 billion combined, up from RMB 5 billion in the first round
• China Mobile and CITIC Securities: new investors in this round, RMB 8 billion each. State-backed China Telecom, China International Capital Corporation (CICC) and China Life Insurance were also named, but NetEase Tech's article gave no amounts for these three
• Chipmakers: ChangXin Memory Technologies (CXMT) and its chairman Zhu Yiming, as well as Semiconductor Manufacturing International Corporation (SMIC), also took part, with amounts not disclosed. On October 22, Reuters had named GigaDevice as a new investor
• Seven corporate investors: vivo, Meituan, Midea Group, Luxshare Precision Industry, Geely, Trip.com Group and Xiaohongshu each reportedly put in RMB 1–3 billion. This is a range for the group as a whole; Xiaohongshu's own amount was not disclosed
• Investment firms: Monolith put in RMB 7.5 billion in this round (according to a table in The Information's article; RMB 3 billion in the first round), IDG Capital RMB 6.5 billion across both rounds, and Boyu Capital RMB 3.5 billion in this round
• National AI Industry Investment Fund: according to the 21st Century Business Herald, RMB 1 billion again, the same as in the first round

The 21st Century Business Herald reported that state-backed investors together provided 27% of this round, far above the 2% in the first round. As far as we have been able to confirm, neither DeepSeek nor Xiaohongshu has issued an announcement or comment on the investment.

3. About DeepSeek

• Founding: DeepSeek was spun off in 2023 from the AI unit of High-Flyer, a quantitative investment firm co-founded by Liang Wenfeng
• Ownership (as of April): Jiemian reported on April 28, citing Tianyancha, that the registered capital of DeepSeek's company (Hangzhou DeepSeek Artificial Intelligence Basic Technology Research Co., Ltd.) rose from RMB 10 million to RMB 15 million, and that Liang's direct stake rose from 1% to 34% (Ningbo Cheng'en fell from 99% to 66%). As actual controller, Liang held an ultimate beneficial stake of 84.29% and 100% of voting rights. These figures predate the June first round
• Later registry changes: The STAR Market Daily reported on July 15, citing Qichacha, that the holding vehicle Hangzhou Chengli (in which Tencent holds more than 33% through two companies) with about 8.52% and the National AI Industry Investment Fund with about 0.28% had been added as shareholders, and that registered capital had risen to RMB 16.4475 million
• Models: According to DeepSeek's official announcements, it released a preview of DeepSeek-V4 on April 24, 2026. V4-Pro has 1.6 trillion total and 49 billion active parameters, and V4-Flash 284 billion total and 13 billion active parameters; a 1-million-token context became the default across its official services. It then released V4-Pro as generally available on August 13, V4.1-Flash on September 10 and V4.1-Flash-1017 on October 17. The weights of V4.1-Flash-1017 are openly available on Hugging Face and ModelScope

4. Developments Around Compute

• Huawei Ascend: According to Reuters, Huawei said on April 24 that "the entire Ascend supernode product line now supports the DeepSeek-V4 series," and that its chips were used for part of V4-Flash training
• Compute constraints: According to Reuters, DeepSeek said on the same day that, because of "constraints in high-end compute capacity," V4-Pro could cost up to 12 times as much as Flash, and that it expected Pro prices to fall sharply once Ascend 950 supernodes are deployed at scale in the second half of 2026. This was an expectation as of April
• In-house chip (reported): Reuters reported on July 7, citing three unnamed people familiar with the matter, that DeepSeek is at an early stage of developing its own AI chip for inference and is in talks with chip-design, foundry and memory companies, an effort that could reduce its reliance on Nvidia and Huawei chips. DeepSeek did not respond to a request for comment
• Use of funds: DeepSeek has not officially announced the fundraising and has not disclosed how the funds will be used

5. What It Means for Data Centers and Compute

• Scale: If the reports are accurate, the second round raised RMB 105.5 billion, more than twice the roughly RMB 50 billion of the first round (both media reports)
• Compute constraints: In April, DeepSeek linked V4-Pro's pricing to compute constraints and tied its expected price cut to large-scale deployment of Ascend 950
• Chip and memory makers among investors: The investors named include chip and memory makers such as CXMT, SMIC and GigaDevice (according to Reuters)

We believe that developing and serving large AI models requires substantial compute resources, and since compute constraints and the participation of chipmakers feature in these reports, AI companies' fundraising should be read alongside developments in compute infrastructure such as chips, power and data centers, with the reported details checked against the companies' official announcements.

6. About Two Sheep Co., Ltd.

Two Sheep Co., Ltd., headquartered in the Telecom Center Building in Aomi, Koto-ku, Tokyo, provides on-site work at data centers and the shipping and installation of IT equipment.

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• Migrations, connectivity and optical modules: we handle data center migrations, arrange IP transit and private lines, and sell optical modules (ModuleSheep)
• Support in Japanese, English and Chinese: we coordinate between overseas customers and Japanese data centers

Main Sources

• DeepSeek: DeepSeek-V4 Preview Release (24 April 2026)
• DeepSeek: DeepSeek-V4.1-Flash-1017 Release (17 October 2026)
• NetEase Tech: Second funding round and investors, citing The Information (30 October 2026, Chinese)
• 21st Century Business Herald: DeepSeek's second round and first-round breakdown (via NetEase, 30 October 2026, Chinese)
• Bloomberg: DeepSeek Raises $15 Billion in Challenge to Leading US Labs (22 October 2026, paywalled)
• Reuters: DeepSeek wrapping up $15 billion fundraising to fuel AI race (via The Standard, 22 October 2026)
• Caijing: DeepSeek to complete fundraising of about RMB 100 billion (via 10jqka, 13 October 2026, Chinese)
• Reuters: Report citing Bloomberg on a raise of at least RMB 80 billion (via The Star, 6 October 2026)
• The Standard: DeepSeek resumes second funding round (5 August 2026)
• Trivium China: DeepSeek reportedly closes funding round of more than $7 billion (16 June 2026)
• Newsquawk: DeepSeek closes a record USD 7bln+ funding round, according to The Information (June 16, 2026)
• Jiemian: Changes to DeepSeek's registered capital and Liang Wenfeng's stake (28 April 2026, Chinese)
• STAR Market Daily: New DeepSeek shareholders and registered capital change (via Cailian Press, 15 July 2026, Chinese)
• Reuters: Factbox on DeepSeek-V4 (via Yahoo, 24 April 2026)
• Reuters: China's DeepSeek developing its own AI chip, sources say (via The Korea Times, 7 July 2026)

About This Article

• This article was compiled independently by Two Sheep from company announcements, media reports (including reports citing business registry data) and other public information available as of November 3, 2026. Items based only on media reports are marked as such. Companies' plans and figures may change.
• This article is for information only and does not recommend any company, security or investment.
• Companies are named only to illustrate industry trends; their mention does not indicate any business relationship with Two Sheep. Company, product and service names are trademarks or registered trademarks of their respective owners.
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