HONG KONG/SINGAPORE: Chinese artificial intelligence startup DeepSeek has engaged CITIC Securities to prepare for a potential initial public offering on Shanghai’s technology-focused STAR Market, two people familiar with the matter said.
The Hangzhou-based company is aiming to begin the IPO process this year, according to the sources, who spoke on condition of anonymity because the discussions are private.
DeepSeek’s appointment of CITIC Securities, which has not previously been reported, suggests the company is advancing preparations for a mainland China listing. Companies seeking to list domestically typically appoint securities firms to conduct pre-listing guidance before submitting an application.
What are the details of DeepSeek’s planned IPO?
The timing of the offering, the amount DeepSeek could raise and its target valuation have not yet been determined, the sources said.
DeepSeek and CITIC Securities did not immediately respond to requests for comment.
The IPO preparations come as DeepSeek seeks additional capital to expand computing infrastructure, develop AI models and attract and retain technical talent amid intensifying competition between Chinese and US artificial intelligence companies.
DeepSeek is currently involved in a funding round that could value the company at 500 billion yuan ($75 billion), according to a Reuters report in July.
The startup raised about $7.4 billion in June at a post-money valuation of more than $50 billion, according to sources and investor filings.
DeepSeek founder Liang Wenfeng personally committed 20 billion yuan in the June funding round, while Tencent Holdings contributed 10 billion yuan and battery maker CATL invested 5 billion yuan, making them the company’s largest external shareholders, according to Reuters.
Why are Chinese AI companies turning to public markets?
DeepSeek’s potential IPO comes as AI companies in China and the United States seek access to large amounts of capital to finance rapidly rising costs associated with computing power, data centres and engineering talent.
Chinese AI developers Z.AI and MiniMax went public in Hong Kong earlier this year, while Beijing-based AI startup Moonshot confidentially filed for a Hong Kong IPO, according to Reuters.
Moonshot was valued at about $50 billion in a recent funding round, while Z.AI has a market capitalisation of around $54 billion.
US AI companies are seeking significantly higher valuations. Anthropic could be valued at up to $2 trillion in a potential IPO, while OpenAI could reach a valuation of as much as $1 trillion, according to investor expectations reported by Reuters.
The valuation gap reflects differences in revenue and highlights the challenge facing Chinese AI developers in turning increasingly competitive technology into sustained profits.
DeepSeek founder Liang is also hoping IPO proceeds could provide stronger incentives for retaining key researchers and technical staff, as the company has recently lost talent to better-funded rivals including ByteDance and Xiaomi.