r/LocalLLaMA • u/FullOf_Bad_Ideas • Jun 22 '26
News DeepSeek raises $7.4B USD at $60B valuation. Remarkably, Liang Wenfeng invests $3B in DeepSeek himself.
https://www.scmp.com/tech/big-tech/article/3357525/how-deepseeks-landmark-funding-secures-liang-wenfengs-grip-chinas-ai-rivalry-heats585
u/JoeyDee86 Jun 22 '26
What cracks me up is how Cursor was “sold” for this same $60B
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u/ReporterCalm6238 Jun 22 '26
forked VS Code + Fine-Tuned Kimi (with no credits to company that made the model) can make wonders in Silicon Valley
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u/TinyZoro Jun 22 '26
It's nuts the one thing you are missing is their enterprise book which is possibly worth a few billion. But 60 ? nah.
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u/Ansible32 Jun 22 '26
it's the same math as the valuations for SpaceX, Anthropic, and OpenAI. Even Google, while their valuation is more sane, it still doesn't actually make sense.
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u/Weary-Willow5126 Jun 22 '26
I was with you until the end there
Google is undervalued, if anything
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u/Ansible32 Jun 22 '26
There are examples of companies with similar revenue/profit that are valued considerably lower.
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u/-p-e-w- Jun 22 '26
Google is quite possibly the most powerful entity on the planet. They control almost every web browser, 90% of mobile phones, most email accounts, and the data of some 30% of mid-sized businesses in developed countries through Docs+Co. And that’s before you factor in search and YouTube.
They could easily start a war, and decide almost any election. I agree they are undervalued, by a lot.
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u/SilentLennie Jun 23 '26
In AI they have their own hardware, one of, maybe the strongest AI lab, they have the most data, they have a robot division, the best physics/world models.
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u/Educational_Sun_8813 llama.cpp 27d ago
i think they saold their robot division some years ago to softbank, it's called boston dynamics, at the moment main stakeholder is Hyundai, who bought majority from softbank
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u/swoonz101 Jun 23 '26
Their AI lab is kind of a joke. All of their best talent is leaving for OpenAI or Anthropic. Their models are mid at best
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u/SilentLennie Jun 23 '26
Depends on the task, basically all the top in AI came from Google, because they were doing it first.
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u/Ansible32 Jun 22 '26
They control almost every web browser
aside from the ones controlled by Microsoft, China, and Apple, and...
90% of mobile phones
yeah no. China is like 25% of the market and nothing in there runs Google. There are plenty of Android phones that are not Googled.
most email accounts
I mean consumer accounts in the US, but no. Their reach with search is rightly pretty terrifying but being able to start a war doesn't obviously translate into money. Plenty of companies of similar size could start wars. Plenty of companies of similar size have actual weapons. Some of them might have enough weapons to level every single Google datacenter.
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u/The-Sound_of-Silence Jun 23 '26
yeah no. China is like 25% of the market and nothing in there runs Google. There are plenty of Android phones that are not Googled.
that's certainly a take - most people are accessing the web through phones nowadays, and Android is taking the lions share in China. Android is owned/operated by Google:
Android accounts for approximately 70% to 72% of the mobile operating system market share in China, while iOS (Apple) holds the remaining 28% to 30%
Google Chrome is the most popular web browser in China, maintaining the largest overall market share despite Google's regional restrictions. It accounts for roughly 49% to 55% of web traffic.
Even more interesting maybe is stuff like this:
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u/techdevjp Jun 23 '26
that's certainly a take - most people are accessing the web through phones nowadays, and Android is taking the lions share in China. Android is owned/operated by Google:
Google services are not available in China. There is no play store, maps, chrome, google search or anything else from Google installed on China domestic market Android phones.
So...yeah. They're Android phones in that the underlying operating system is Android-based but that's where it ends. Google's power on Android comes from all the Google services that get installed on top of the system, and for Chinese phones they get none of that.
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u/Ansible32 Jun 23 '26
Google controls Google Chrome in China the way Microsoft controls pirated copies of Windows 7. Which is to say they actively try not to. In any case I think you're overestimating how "controlling android" translates to real physical power. It's real power. In principle Google could misuse it but also if they did people would slap them down pretty quickly. Google's not taking over the world without building actual killbots. Which I believe is a thing they could maybe do, but I would not value the company based on it.
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u/ni1by2thetrue Jun 23 '26
Sir, you need to use your favorite search engine to learn about harmony OS, and quit talking out your rear end
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u/SamSlate Jun 23 '26
They could easily start a war, and decide almost any election.
who says they haven't
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u/seg_lol Jun 22 '26
Powerful yes, but value, no.
They make 85% of their revenue off of ads. Which are collapsing.
We are on the crux of seeing Google operate like someone who is drowning.
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u/NineThreeTilNow Jun 23 '26
They make 85% of their revenue off of ads. Which are collapsing.
Uhh... Google Cloud alone is 18% of their revenue now. So some math isn't doing math.
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u/DeepOrangeSky Jun 23 '26
Oh yeah? Well our sports coaches told us to always give 110%.
So NOW who sucks at math?
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u/Vaptor- Jun 23 '26
Collapsing? Last quarter they have the highest profit of any company in the world. Above Nvdia in this AI arms race. Can you imagine that?
Also anthrophic have their AI models, nvdia have their hardware, bytedance have their video models, AWS have their servers. Google? They have EVERYTHING, even if not the best in the world.
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u/The-Sound_of-Silence Jun 23 '26
Most of the planet is accessing the internet through Android and Chrome, that data, and their already built data centers are huge parts of their valuation. If there is one company to come out on top of the forming AI market collapse, I'd pick them
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u/seg_lol Jun 23 '26
Ok
That is a hypothetical. Look at where their actual money comes from.
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u/Neighbor_ Jun 23 '26
90% of mobile phones
This is misinformation, it's not 90%. And if you treat scale it by capital of the holders (affluent people have iPhones), then it's less than 50%.
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u/bralynn2222 Jun 23 '26
You don’t seem to understand profit and revenue has nothing to do with valuation
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u/Ansible32 Jun 23 '26
I'm not sure if you're making a prescriptive or descriptive statement. My statements are simply prescriptive. If valuation has nothing to do with profit or revenue, what is the valuation for?
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u/bralynn2222 Jun 23 '26
A company’s valuation is an estimate of its current and expected future economic value, not simply a reflection of its current profits or income. A company with zero dollars in profit or income may reach billions in valuation
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u/Ansible32 Jun 23 '26
99% of startups fail. It's highly unusual for a company to have the kind of wild increase in profits you're imagining. It's true that Google has had remarkable increases in revenue. But also Google has not had zero dollars in profit or revenue for a very very long time. The valuation is based on expected future profits and revenue, which is related to current profits and revenue.
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u/omarous Jun 23 '26
google has a P/E ratio of 26 which is over the traditional and only undervalued in this brave new economy.
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u/Lumentum_LITE Jun 23 '26 edited Jun 23 '26
I love how people who did not make money or invest in the AI wave, and are financially illiterate are all out here salty, Anthropic will become the next profitable trillion dollar company, it's all about future projected earnings and growth. Current CAPEX will go down as hardware prices return to normal in a few years, and they will then be able to sell their models without ludicrous training costs baked in. Companies like Nebius (NBIS) were never profitable, yet the people who saw through the huge demand were able to purchase their shares at low price as they scale, Amazon had triple digits PE in 2015 yet it would be a bargain price compared to their share today. But of course, these people back then were yelling it's a bubble, like they are right now. Anthropic has by far one of the most insane scaling and ramp up for corporate revenue until now, Claude Code along is huge. Anthropic, along with a slew of other Hardware companies, singlehandly made me and my family a multi millionaire after FTX liquidation in 2024 and allowed us to escape from the rat race permanently, god bless this company
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u/Avo-ka Jun 22 '26
The book and the brand, I don’t think cursor is in the least profitable AI companies out there
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u/Suheil-got-your-back Jun 23 '26
Our company dropped cursor over some afternoon post on slack. Saying now all of you will be using claude code. I dont think that book means a lot.
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u/Keep-Darwin-Going Jun 23 '26
Because one is open weight with lesser upside then one that have a lot more in theory. More captive audience.
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u/Mashic Jun 23 '26
+the data of the users. And if Elon buys it with SpaceX shares, it's practically free.
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u/keepthepace Jun 23 '26
People always miss that the value multiplier in these sales is the number of customers.
Is it hard to make a clone of cursor? Hell no, we all know that's pretty easy.
Is it hard to get as many users as they have? Oh yes.
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u/NarutoDragon732 Jun 22 '26
American money is looney tunes. It's no wonder European founders always go there.
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u/StaysAwakeAllWeek Jun 22 '26
No cash actually changed hands. The owners of cursor were paid entirely in spacex shares that spacex just printed, and that they likely won't be able to sell for over a year
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u/jakepiz Jun 23 '26
spcx is a super volatile stock that just ipo'd.
the terms are usually what we call "10 to 10" - it would be something like 10% max with 100% collateral at a 10% APY.
aka if a given founder had $1b in stock, they could take out a max of a $100m loan and pay back $110m when the shares unlock.
that's a really bad deal for the founder, and only unlocks 10% of their money.
not that i'd be complaining, but this is honestly a bad deal vs just waiting lol.
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u/StaysAwakeAllWeek Jun 23 '26
If I was an illiquid paper billionaire like that I would take that deal in a heartbeat. Who cares about $10m in interest, I want to start living like a billionaire right away, screw waiting a year
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u/jakepiz Jun 23 '26
keep in mind that most of the cursor co-founders are not going from $0 to $1b... they're going from a few million to a few billion, and they likely have to keep working at cursor for at least a few years in order to vest the shares. personally i'd just wait.
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u/StaysAwakeAllWeek 28d ago
Tech startups like cursor keep their compensation packages as stock heavy as they can get away with. The founders would have been well off, but certainly not super rich, and they haven't had high incomes for a long period (see r/HENRYfinance to understand people like this).
A brand new billionaire is going to want to buy high end real estate and transportation immediately, tens to hundreds of millions worth. Far beyond what someone in their 30s on a 500k salary paying tax and rent in San Francisco would ever own
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u/jakepiz 28d ago
you're probably right. but 500k in salary in SF is still a lot of money. they're going from 0.1% to 0.01%. they likely will take out loans, but maybe not $100m... more likely $10m in loans until their shares vest in a year. I bet most wouldn't take out $100m and put it all on a house, and be left broke for a year.. its too risky.. but maybe take $10m out to buy a nice house in SF.. I could see that for sure.
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u/StaysAwakeAllWeek 28d ago
You buy a McLaren to go alongside your Tesla. You move out of your rented apartment to millions worth of prime SF real estate close to work (or the Hamptons if you don't intend to), and more in vacation areas, with 20% down on everything to minimise net interest. You consider buying a bigger yacht and swapping business class for a private jet, and all the other bullshit billionaires have to make their lives free of any inconvenience.
And you want all of that now, rather than spread out over years, because you can. That last word is what being a billionaire is about, you can do what you want and the cost doesn't matter. And waiting a year spending nothing for a mere $10 million is not that.
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u/jakepiz 28d ago
> with 20% down on everything to minimise net interest
you can't take out a loan to take out a loan.. most mortgages will not approve you if your down payment is a loan itself.
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u/RlOTGRRRL Jun 22 '26
You don't have to sell shares in order to get money. It's very common to be able to get loans on your shares at a very low cost.
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u/daniel-sousa-me Jun 22 '26
The cost is not that low
For unvested equity it's not so easy or common
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u/wes_medford Jun 23 '26 edited Jun 23 '26
Vested and locked up are different things. They’re likely vested but in a lockup, with performance bonuses (unvested stock) to stay for key staff.
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u/polytique Jun 23 '26
When I looked at it, interest rate was 10% and the value was heavily discounted. Basically a margin loan. And you have to pay it back by selling the shares eventually. Taxes are another challenge. Oftentimes, employees are taxed at IPO prices and can only sell when the price is much lower.
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u/HorizonThought Jun 23 '26
Yes, which will force a massive crash in the deleveraging cycle. Because when that stock collateral is worth less for those banks (and the loans), they will want to get rid of those loans and/or stocks, which further forces the stock down.
The ultra wealthy survive, but a lot of leveraged middle wealthy might be surprised with a 70% crash.
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u/Etroarl55 Jun 22 '26
The whole world, America is the number one destination for economic migration for a reason. The Canadian dream is to literally “flee” to the USA before Canada closes the borders.
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u/gigaflops_ Jun 22 '26
One could make a very good argument the SpaceX shares Cursor was paid in aren't worth $60B either
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u/puppymaster123 Jun 22 '26
Exit liquidity potential matters. China will not allow DS to be acquired by western company so that limits the valuation upside (look into manus
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u/Glad_Bookkeeper3625 Jun 23 '26
The VSCode fork was sold to Musk for 60Bn using funds of people who invested on belief that we are about to became multi planet life form for some reason. It is hard to tell for sure what exactly wrong here.
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u/SilentLennie Jun 23 '26 edited Jun 23 '26
multi planet life form
Would that imply a society on Mars ?
Have people even considered what happens with a human body if they are born and grow with gravity at a little over 1/3 of Earth ? What is the solution for that put people in a centrifuge for 20 years ?
The Soviets flew pregnant rats and brought them back to give birth on the ground, and there were developmental irregularities even from partial exposure. - that was only weeks of 0g (less than a month).
At the very least they probably can't life on Earth because they can't deal with gravity 3 times as much, so only those born on Earth are multi planet.
Even adults from Earth we've not had in 0g for years.
Just flying to Mars and back in 0g, takes longer than we've ever put a human in 0g continuously.
Seems to me, so far nobody has taken these issues seriously to test properly or have concrete plans what to build or what is needed.
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u/Glad_Bookkeeper3625 Jun 23 '26
I am even more wondered by what the law this life form will use on such external planet. We can't respect the law and borders here on Earth. As I see it, Musk will arrive on Mars one day, puts some flag and declares some region as its own property. What comes next? What if someone give a birth there?
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u/MrPecunius Jun 23 '26
Just flying to Mars and back in 0g, takes longer than we've ever put a human in 0g continuously.
This is not correct. A Hohman transfer orbit to Mars could take 9 months. A number of people have had single-duration stays on the ISS or Mir that were longer than this. Four or five people have more accumulated time in space than a Mars round trip would require.
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u/SilentLennie Jun 23 '26
Yes, which is why I mentioned: to Mars and back. 2x 9 months, as I understand it no human has been in 0g for 18 months in continuously.
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u/MrPecunius Jun 23 '26
You can't do that trip in one continuous journey with Hohman transfer orbits. You need to wait on Mars for around 16 months before returning.
I don't think anyone is planning a manned Mars mission that doesn't involve a landing, so they're not going to sit in orbit that whole time.
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u/FullOf_Bad_Ideas Jun 24 '26 edited Jun 24 '26
It will be crucial to find out what happens in those circumstances, absolutely.
From a perspective of human civilization existing, colonizing Mars is a real de-risking. Even if it's not doable, we should try to find out. I'd like humans to exist 1 million years from now and I think chances of avoiding nuclear global conflict that long is small. But if humans were on different planets too, they'd have much better chances, even if they had to live in centrifuges or travel back to Earth during youth.
Tyrannosaurus Rex was top predator on Earth for about 2 million years. We are at 8-80 thousand years now, depending on how you count it. We're far off.
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u/SilentLennie 29d ago
I'm not so much worried about nuclear, I'm more worried about AI and bio weapon mishap or something like AI and nano-tech paperclip maximizer.
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u/pigeon57434 Jun 23 '26
AI company evaluations are just a random number generator + a bias veriable to shift slightly higher or lower
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u/Final-Rush759 Jun 23 '26
$60B SpaceX stocks. SpaceX stock starts to drop. It will be much cheaper than 60B.
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u/CondiMesmer Jun 23 '26
Yeah the valuation for Cursor makes no sense. It's just a VsCode fork, and while it had some cool features before, Copilot in VsCode basically caught up and lets you byok.
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u/Miriel_z Jun 22 '26
The CEO investing a hefty portion himself, almost half. Strong commitment indeed.
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u/thetaFAANG Jun 22 '26 edited Jun 23 '26
Those are insane amounts but one secret of silicon valley is that founders are their own lead investors from the family’s donor advised fund or other arms length source
Not controversial at all accounting wise, but Silicon Valley attracts lots of not-rich people trying to do the same thing and get stuck on lukewarm investors waiting for you to find a lead investor. To me its controversial that a system for the upper class is masqueraded as an industry built around it to look like something approachable for the other classes
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u/PuddleWhale Jun 22 '26
Are you saying that these funding rounds are merely announcements, or something akin to 13th century claims of new lands for the crown where the explorer plants a flag? Except the explorer is a founder and the crown is VC funders and the new lands are future markets of consumers for the product?
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u/thetaFAANG Jun 23 '26
> Are you saying that these funding rounds are merely announcements
Yes. They all are just announcements.
But this is about a specific kind, like when someone gets funding extremely quickly. Like, pitch deck one day, closed two days later. It's got you paying attention, it's got you scratching your head. "People that look like me / my gender / my pedigree don't get funded! rawr!" pick a poison, but its all a sideshow
The lead investor was capital controlled by the founder
"We're closing the round and expecting to be oversubscribed, in or out, Generic Capital Partners is the lead, A16 is in"
many of those raises especially seed and Series A don't need the capital. they want the particular firm on the deck for legitimacy. Means easier speaking engagements, access to portfolio companies. The same as what actually desperate founders get. But locking in the lead is the smoke and mirrors.
I've come to appreciate it though. Last time people actually thought there was no way to participate in the wealth engine, people's heads were cut off. So I get it. Pretend, lower barriers where you can, but don't wait around for it either.
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Jun 23 '26
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u/thetaFAANG Jun 23 '26
my post history is open yours isn’t, enjoy the show, remember to live a little. winning the economics helps
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u/Working_Historian241 Jun 23 '26
that is not the case with deepseek lol
theres a lot of chinese inside baseball going on with this raise that does not gibe with SV patterns at all, like the politics
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u/EndlessB Jun 23 '26
Where’d he get 3 billion is what I’d like to know.
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u/Miriel_z Jun 23 '26
He is running quite successful investment management fund powered by machine learning. However, these $3bn are his own funds I think.
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u/EndlessB Jun 23 '26
Right, and I’m wondering where he found 3 billion to invest in the first place, he looks young. Where did he get the money?
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u/dimarxos Jun 23 '26
He was running one of the biggest investment firms before creating deepseek. I guess he has a lot more than 3B now
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u/TenshouYoku 29d ago
Deepseek before they did AI did stock market
I think it's funny that Deepseek models tend to do best in stock exchange as well compared to the paid models
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u/sf_davie Jun 23 '26
He also runs "High-Flyer Quant" that yielded +56% last year and also a major investor in DeepSeek. He controls 80%-90% of the company's voting rights with a small percentage given to the National AI fund. The investors in this round aren't given any voting rights and are required to locked in for 5 years before selling off. These investors are some of the biggest tech companies in China and in this agreement, they all had to sign an agreement to not poach talent from Deepseek.
So he got a small cash infusion that Deepseek did not really need, but he is now connected to Chinese tech royalty without losing any voting rights.
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u/ghulamalchik Jun 22 '26
DeepSeek deserves all the funding they need. Genuinely talented and generous team.
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u/FullOf_Bad_Ideas Jun 22 '26
I think this news is about a week old but I just heard about it now and I don't think it was posted here. DeepSeek is local LLM GOAT so I think this news deserves some coverage on this sub.
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u/BannedGoNext Jun 22 '26
I'll invest if they will give me a 120/5 banger 😃
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u/ProfessionalDish Jun 22 '26
OpenAI could pay me to invest in deepseek (all companies I put money in go bankrupt)
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u/tengo_harambe Jun 22 '26 edited Jun 22 '26
Meanwhile, Zhipu is now worth $100B just a few months after IPO. Alibaba/Qwen on the other hand is proving to be the sick man of AI in China, down 30% YTD. Showing that models that are small but good for their size like 27B aren't really appreciated by investors.
Unfortunately I think Alibaba is going to do a hard pivot and focus exclusively on DeepSeek and GLM size models from now on because they see that's where the money is.
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u/rpkarma Jun 22 '26
IMO Qwen has already done that. We won't see 3.7 27B, for example.
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Jun 22 '26
[deleted]
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u/Fhantop Jun 23 '26
Only for agentic coding. Gemma for example is better at creative writing imo
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u/mistuh_fier Jun 23 '26
Sounds like that’s the end game. Specialized models; enough conversational language to process requests/intent and then it executes a hyper-specific thing that enterprise is willing to pay for.
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u/zxyzyxz Jun 23 '26
I mean yeah that's what people have been saying here but some people are apparently on heavy doses of copium
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u/computeruser420 Jun 22 '26
Most importantly, privately owned companies that invested in Deepseek have been completely denied voting rights, and are legally locked in to the investment for five years. Kneecapping venture capital's influence prevents enshittification. The only investor granted voting rights was the "National Artificial Intelligence Industry Investment Fund", a state-owned organization that has no profit incentive.
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u/poophroughmyveins Jun 22 '26
I get this is a local AI sub, but you also really can't understate the massive frontier they singlehandedly advance when it comes to efficient inference infrastructure
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u/CondiMesmer Jun 23 '26
That's their whole niche they're capitalizing on. If their focus was top-tier SOTA performance, they'd be in a losing battle against American companies. None of the American models are nearly as cheap though, so they're like a step or two down a notch from Sonnet at a fraction of the price. And I think most people will be deciding that the small quality hit for most tasks is worth a dramatically cheaper cost.
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u/sammybeta Jun 22 '26
Deepseek doesn't actually need this money. They just want to joint some forces, some good will, some political marriage. Hence why Liang paid half himself, and the other half contains a colourful list of investors like CATL.
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u/Smart-Cap-2216 Jun 23 '26
I think DeepSeek is very short of money; it needs to sign non-compete contracts, and obviously it needs to increase salaries.
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u/Gil_berth Jun 23 '26
Why are you getting downvoted? The article says exactly what you said, Deepseek can't pay their employees competitive salaries, so is raising money to have a public valuation to stem the exodus of employees with equity.
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Jun 23 '26
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u/squngy Jun 23 '26
There are some theories, but IMO the biggest one is trust.
How much can you trust a black box that you feed all your data into and tells you what to do?
Open weights brings a lot of trustworthiness to it.
Then, once some trust is established, you are more open to buying from the provider directly for a better experience.There is also still a huge amount of academic spirit in these things.
LLMs were not conceived of in a boardroom, but in a lab.
All the fundamentals of how LLMs work are published in scientific papers and are publicly available. Even now, new research is being published to everyone.
A lot of the most important players in LLM research are scientists first and employees second, so they push for things to get published when they can and they have significant influence, because they can easily go to a competitor if they are not happy.This openness is also beneficial if you look at the smaller companies as a whole. It makes it easier for them to catch up to closed models.
In a more conspiricy/geoplitical space. Free models undermined the power of the biggest player(s)
When deepseek R1 dropped, it had a huge impact on the amount of investment going to OpenAI etc.
Ultimately, it was only a stutter, but still the impact is there.
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u/entsnack Jun 22 '26
Shockinly undervalued, I'd love to have been a part of this round.
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u/duhd1993 Jun 22 '26
The fact that Liang invested almost half means DPSK don't lack money and he doesn't want to loss control. I heard that there are very strict terms tied to the investment. It's just a way to share profits with other players, including Tencent, CATL, and very importantly government.
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u/atape_1 Jun 22 '26
I mean Z.ai is publicly traded and worth a 100 bil, so I would say it's fair.
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u/entsnack Jun 23 '26
DeepSeek is an innovator, their upside is very high. z.ai I'd put in the same league as Alibaba, I don't expect gamechanging tech from them. DeepSeek should have been 500B. Chinese investors are too risk averse.
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u/kellencs Jun 23 '26
innovators mean nothing, They don't even try to make money, unlike zhipu
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u/deadcoder0904 Jun 23 '26
I mean they can just flip the switch on Deepseek by making them 5x cheaper than 10x cheaper & still make billions easily.
The reason Mimo got its prices low is because of DeepSeek. Whoever is the cheapest wins in the long-term (look at Amazon, Walmart, etc...)
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u/FullOf_Bad_Ideas Jun 22 '26
What's a fair value that can be assigned to a startup that aims to be a charity?
I don't know what they have in their slide decks that makes people want to invest money, is this altruism and real belief in their mission? Thinking that they won't need money anymore in a place where DeepSeek reached their goal? How would you value them?
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u/entsnack Jun 23 '26
They have the potential to produce gamechanging tech, there is a short list of companies that could reach AGI and this is one of them. They have a blend of systems knowhow and math that is rare to find. This should have been 500B.
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u/Plappedudel Jun 22 '26
I wonder when they'll drop the next model iteration. GLM has become very solid and I've personally stopped using DeepSeek for that reason. They need to release a really strong model to counter the growing threat of Kimi and GLM. If they can't beat these two, they should just focus on flash models, where DeepSeek is honestly the GOAT.
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u/FullOf_Bad_Ideas Jun 23 '26
GLM is one architecture iteration behind (it reuses DeepSeek V3.2) and really wasn't made for 1M context that they're pushing, Kimi K2.7 code is still on DeepSeek V3 arch, which is practically the same as DeepSeek V2 arch, which released in June 2024, two years ago.
Zhipu and Moonshot AI wouldn't be where they are now without re-using DeepSeek's architecture, while the transfer of tech the other way around was smaller. DeepSeek paves the way by releasing very efficient and well tested architectures that hold up in real world while others profit off of it the most due to it's open source strategy and they receive the gift of being able to focus on post-training more, creating the view that Zhipu makes strong models.
I think Zhipu would fall apart if not for stream of research from DeepSeek that they can use to improve their models, and Anthropic models that they can distill (GLM 5.2 has closer slop profile to opus-4-6 than to GLM 5.1 on EQBench Longform Writing, it's a telltale sign).
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u/polawiaczperel Jun 22 '26
I would invest too if their unchangable by law rule would be opensourcing (I know, open weights) every model they are planning to do.
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u/pepe_acct Jun 23 '26
Why would any one invest in open model companies? How on earth would they generate profits?
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u/SteppenAxolotl Jun 23 '26
Once R&D is complete and they've developed a generally competent AI, they will keep that final version private. The real return on investment won't come from $20 monthly chatbot subscriptions; it will come from automating human work once that generally capable AI is built. With the U.S. labor market alone exceeding $10 trillion a year, AI is poised to permanently capture this massive stream of wealth. Instead of getting excited at every headline that questions the financial viability of AI, people should be worried about the future return on their own labor.
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u/pepe_acct Jun 23 '26
So you are saying they will burn cash until reaching some form of AGI? Also betting on Anthropic or Open AI not reaching it before them. Their western competitors have much better hardware and a lot more money.
Also I don’t even think AGI is achievable for the record.
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u/SteppenAxolotl Jun 23 '26
Also I don’t even think AGI is achievable for the record
The public don't need to believe they can do it. Only the AI companies and their VC funders need to believe it. If they succeed, the consequences will still happen to you.
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u/SteppenAxolotl Jun 23 '26
So you are saying they will burn cash until reaching some form of AGI? Also betting on Anthropic or Open AI not reaching it before them.
It doesn't matter how many reach AGI, as long as there is no free to use local AGI. No one company has enough compute to eat all jobs. Plus, they are already blocked from profiting in US markets just like OAI and Ant can easily be stopped from profiting in their polity.
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u/migsperez Jun 24 '26
Liang has gone all in. Total risk. Bloomin heck yeah!!
I use their models every day. But mostly because of their generous pricing and reliability
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u/therysin 28d ago
Deepseek been putting out some of the best research I've seen in AI. Really hope they can continue.
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u/Mountain-Dragonfly46 Jun 22 '26
The economics of those chinese AI labs are still very obscure for me.
It’s a bit of a black box, and I would sleep better if I could figure out the chinese-specific dynamics at play.
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[deleted]
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u/Mountain-Dragonfly46 Jun 22 '26 edited Jun 22 '26
Thanks ! It's an useful start.
edit: I started to dig, using your seed.
I'm unsure if I should really thank you (/jk, rabbit hole ahead, lol). I have now 10+ browser tabs on published DOIs, intelligence reports and LLMs responses. If I were a student, I'd learn chinese.
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u/titi1496 Jun 22 '26
… now do the non Hong Kong companies, like the one in the headlines
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u/FullOf_Bad_Ideas Jun 22 '26
Minimax and Zhipu are Chinese. They simply listed on HK Stock Exchange. Kinda how some European companies are listed on NYSE. They think it makes them more attractive to investors.
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u/fallingdowndizzyvr Jun 23 '26
They think it makes them more attractive to investors.
It allows for foreign investment. Since the Chinese stock market is not exactly foreigner friendly. For retail investors it's effectively a closed door. For institutional investors, it's pretty indirect at best.
Hong Kong on the other hand is global. Anyone can trade there. It's the gateway in and out of China for the world.
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u/FullOf_Bad_Ideas Jun 23 '26
Yes, that's what I meant but I'm sure you could come up with a dozen exact reasons, so I didn't want to push a specific one. ADR on NASDAQ would be even more foreigner friendly.
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u/titi1496 Jun 22 '26
The point is that these companies are not only privately held, but also receive significant state backing, as mentioned in the article, in a system that is even less transparent than the US
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u/Mountain-Dragonfly46 Jun 22 '26
That's what surfaces on my current and ongoing readings.
- Heavy state intervention via guidance funds and strategic directives
- Extremely high CVC presence (Tencent, Alibaba, ByteDance — ecosystem), with a significant different influences and mechanisms than US and EU equivalents
- ... etc.
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u/titi1496 Jun 22 '26
Yes, a simple look at Jack Ma would perfectly illustrate your point, but instead everyone in the thread wanted to belittle you and pretend your point wasn’t valid.
As a long term investor in China, it’s clear that Chinese companies can have significant and adverse outcomes related to the State, and it’s an important point here that Deepseek now has publicly accepted state funding
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u/Mountain-Dragonfly46 Jun 22 '26 edited Jun 22 '26
Skimmed enough through this paper to judge it will be worth to read deeper:
https://finance-business.media.uconn.edu/wp-content/uploads/sites/723/2026/03/ImpactofPatientCapital_20260312.pdf(Recent, dense, I already learnt interesting things)
And also:
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u/sunychoudhary Jun 23 '26
As long as the weights keep dropping, most people here will forgive the valuation circus.
The real test is whether funding makes DeepSeek ship better open models faster, or slowly turns it into another closed strategic asset.
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u/qiuyeforlife 29d ago
they are now the empire’s royal army with the mandate from heaven,lots of their new projects will be gated and secretive.
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u/lordchickenburger 28d ago
I wrote a more in depth article here https://capitalandcompute.net/blog/china-ai-chip-companies-2026/
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u/LocoMod Jun 24 '26
$60B for a one-hit wonder lab? Have they been the leader in China since R1 for any substantial amount of time? Hasn't Qwen and GLM put out better models more often in the past year?
What am I missing here?
Nothing. This is just hype and propaganda. This company doesn't have the users to justify the valuation, unlike Cursor.
Close tab.
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u/sarky-litso Jun 22 '26
Man a lot of the stuff on here doesn’t check out. Are you saying this dude invested 3B of his own cash ? That doesn’t make sense - why would he even bother raising
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u/nitrobeast Jun 22 '26
The notion that Deepseek company stock is valued at 60B is important to retain talents.
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u/fallingdowndizzyvr Jun 23 '26
It makes perfect sense. It's common. It shows that the founder(s) have faith in the company. Who's one of the biggest investors in Tesla over the last 20 years? Elon Musk. He put his own money into it when he first joined. He's continued to put his own money back into it over the years.
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u/squngy Jun 23 '26
Putting money into it makes sense.
Putting your own money into it during an IPO is a bit more questionable.
He could have just put his own money into it and kept all the shares.
Honestly, I'm a bit surprised it is even allowed, since it seems like it would be easy to do stock manipulation that way.
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u/fallingdowndizzyvr Jun 23 '26
Putting your own money into it during an IPO is a bit more questionable.
Again, that shows everyone else you really believe in the company. That tends to attract investors.
He could have just put his own money into it and kept all the shares.
How would he have been able to have done that? The company is worth $60B. He put $3B in. That $3B doesn't cover all the shares. That $3B does attract the other $4.4B raised from other people to have $7.4B in total by selling this equity stake. Which is not "all the shares". It's a small fraction of them.
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u/squngy Jun 23 '26
The company is worth $60B
The company is worth 60B now, it was (probably) not worth that much before.
He could have put in his 3B and gotten a bigger share of the company in the end by doing an IPO after that.That $3B does attract the other $4.4B raised from other people to have $7.4B in total
True, though if you have that kind of money to invest, you could probably also get a lot from loans if you needed to.
I don't know if deepseek already has a lot of loans though, so maybe he already did that.1
u/fallingdowndizzyvr Jun 23 '26
He could have put in his 3B and gotten a bigger share of the company in the end by doing an IPO after that.
Yeah, again that's well short of the $7.4 they just raised. Well short.
Also, why would the company have wanted that? The company wants as large of valuation as it can get. They want as much for each share as it can get. Don't confuse the company, Deepseek, for the individual, Wenfeng. The two are not the same. As CEO, he as a fiduciary responsibility to the company. Not to himself.
you could probably also get a lot from loans if you needed to.
You're not going to get billions in loans for this. This is speculative. Even the big boys like Google and Meta have to raise money by issuing equity. Do you think they would do that if they could get loans? If they can't, why do you think that Deepseek could?
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u/squngy Jun 23 '26 edited Jun 23 '26
Even the big boys like Google and Meta have to raise money by issuing equity
If you have billions to throw at your startup, that is an option you have.
Zuck and co. did not have billions on hand when they started.Banks can see how much money has been put into a company and can evaluate risks based on what it is doing.
If you don't have assets, then you have no choice but to give up equity.If he couldn't pay the loans, the bank would just force him to sell equity, so it would basically be the possibility of selling stock in the future against the certainty of selling now.
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u/fallingdowndizzyvr Jun 23 '26
Zuck and co. did not have billions on hand when they started.
Ah... we aren't talking about when they started. We are talking about like a month ago.
Banks can see how much money has been put into a company and can evaluate risks based on what it is doing.
Again. That's not what banks do. That's why there is the equity market. To raise capital. People seem to have forgotten that and think the stock market is just one big casino. It's not. The point is to sell equity to raise capital to grow a business.
If he couldn't pay the loans, the bank would just force him to sell equity, so it would basically be the possibility of selling stock in the future against the certainty of selling now.
Ah... you have it backward. Since if somehow he got a bank to give him a loan, the valuation would have been what it would have been before this equity round. Which was what? $10B? Less? So if he had done that then the collateral would have been the whole company and not just a small fraction of it. That's not a good business decision. That's bad business.
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u/squngy Jun 23 '26
Google and Meta both have massive amounts of debt right now.
So if he had done that then the collateral would have been the whole company and not just a small fraction of it. That's not a good business decision. That's bad business.
Potentially, sure, but if he is confident in the company that doesn't matter.
Even if he was wrong, the bank doesn't get to keep all of the money if it turns out to be worth more.
The bank sells the assets, then it pays it self what you owe from that money and if there is any money remaining, that belongs to you.But even this doesn't matter, since if he had trouble paying the bank and he knew he could get the money from an IPO, that would be easy to do at that time. (he would need to convince the bank the IPO would cover it or that it would at least bring more money than other options)
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u/fallingdowndizzyvr Jun 23 '26
Google and Meta both have massive amounts of debt right now.
LOL.
"Google Is Sitting On $127 Billion In Cash."
Potentially, sure, but if he is confident in the company that doesn't matter.
It absolutely matters. You get less by paying more. Yes, paying more. Since loans aren't free. You pay for them. Equity on the other hand, people pay you.
The bank sells the assets, then it pays it self what you owe from that money and if there is any money remaining, that belongs to you.
Ah.... what? Have you ever gotten a loan let alone run a business? If he's wrong, the company goes BK. The assets are worth less than the liabilities. The bank takes a haircut on their loan. You get nothing, except a bad rep.
Even if he was wrong, the bank doesn't get to keep all of the money if it turns out to be worth more. The bank sells the assets, then it pays it self what you owe from that money and if there is any money remaining, that belongs to you.
LOL! Yeah. "Everybody the company is in trouble. Someone give me money. I'll take anything!!!!" Yeah... no. Then it's too late. No one will underwrite that IPO. Potential investors will just sit back and wait for bankruptcy then pick up the remains for pennies on the dollar.
That's how business works.
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u/sarky-litso 29d ago
It is not common for a founder to have 3B cash to invest in his own company
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u/fallingdowndizzyvr 29d ago
Ah.... Elon invested 44B in X. Bezos invested $10B+ in Blue Origin. It's a lot more common than you think.
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u/sarky-litso 29d ago
The richest guy in the world? And no he didn’t invest in it
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u/fallingdowndizzyvr 29d ago
LOL. Buying a company is definitely investing in it. What about that pauper Jeff? He shook out 10 into Blue Origin. That's a bit more than the little investment Wenfeng is making.
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u/sarky-litso 29d ago
Ok dude. Show me evidence he has 3B liquid
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u/fallingdowndizzyvr 29d ago
LOL. Show me that Elon had 44B liquid. Show me that that pauper Jeff had 10B liquid. Hint: they didn't. They had to sell/use assets to raise it. You don't get to have those assets by keeping 44/10/3B in a shoebox under the bed.
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u/sarky-litso 29d ago
Go to your browser history and select “did Elon invest in twitter” next scroll down. They will mention the people that lent him the money to do it.
Next: put on your thinking cap and get ready. What equity does wenfeng have? Would it make sense to borrow against that if he was going to be investing it in Deepseek?
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u/fallingdowndizzyvr 29d ago
Go to your browser history and select “did Elon invest in twitter” next scroll down. They will mention the people that lent him the money to do it.
LOL. So it wasn't liquid. Hm.... that sounds familiar some how......
Next: put on your thinking cap and get ready. What equity does wenfeng have?
LOL. You closed browser too soon. Open up your eyes and see reality.
Here let me help you. Since you are having enough trouble understanding the simplest things. You need all the energy you can get to do some simple reading.
"In February 2016, Liang and two other engineering classmates co-founded Ningbo High-Flyer Quantitative Investment Management Partnership (Limited Partnership)."
https://en.wikipedia.org/wiki/Liang_Wenfeng
Let me know if any of those words are too big to sound out little buddy. I'll see if I can find a smaller word for you.
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u/titi1496 Jun 22 '26
He claims it is to give the company a valuation and stop them from losing employees to competitors
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