Chinese artificial intelligence startup DeepSeek has hired CITIC Securities to prepare for a potential initial public offering on Shanghai’s technology-focused STAR Market, as the AI developer seeks fresh capital to expand computing infrastructure and retain talent, two people familiar with the matter have told Reuters.
The Hangzhou-based startup aims to begin the IPO process this year, the people said, requesting anonymity because the discussions are private.
DeepSeek’s engagement of CITIC Securities has not previously been reported and indicates that the company is moving forward with preparations for a mainland China listing. Companies seeking to list in China typically appoint securities firms to provide pre-listing guidance before formally submitting an application.
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The timing of any offering, the amount DeepSeek could raise and its potential valuation have not been determined, the sources said.
The potential IPO comes as DeepSeek seeks additional funding to finance the rapid expansion of its computing infrastructure, develop new AI models, and compete for researchers and engineers in an expensive global AI market.
The company is currently in the middle of a funding round that would value it at 500 billion yuan ($75 billion), Reuters reported in July. DeepSeek raised about $7.4 billion in June at a post-money valuation of more than $50 billion, according to people familiar with the deal and investor filings.
DeepSeek founder Liang Wenfeng personally committed 20 billion yuan to that funding round. Tencent Holdings contributed 10 billion yuan, while battery manufacturer CATL invested 5 billion yuan, making the two companies the startup’s largest external shareholders, according to Reuters.
The funding and IPO preparations highlight the enormous capital requirements emerging around frontier AI development. Training and deploying increasingly capable models requires large amounts of computing power, data-center capacity, electricity and specialized engineering talent.
For DeepSeek, access to capital is also becoming increasingly important as Chinese AI companies compete against each other while operating under a different funding and market environment from their U.S. counterparts.
Chinese AI Companies Rush Toward Public Markets
DeepSeek’s potential Shanghai listing comes amid a wave of AI companies seeking access to public capital. Chinese AI developers Z.AI and MiniMax both listed in Hong Kong earlier this year, giving investors new ways to gain exposure to the country’s rapidly expanding AI industry.
Beijing-based Moonshot AI has also confidentially filed for a Hong Kong IPO. Moonshot was valued at $50 billion in a funding round, below DeepSeek’s reported private-market valuation and Z.AI’s market capitalization, which stood at about $54 billion according to the supplied figures.
The Chinese companies’ valuations remain significantly below those being discussed for major U.S. AI developers. Anthropic, the developer of Claude and Mythos, could command a valuation of as much as $2 trillion in an IPO, according to some investor estimates. OpenAI could seek a valuation of up to $1 trillion in a potential offering.
The gap highlights a major difference between the U.S. and Chinese AI markets: technological capability does not necessarily translate into comparable revenue or profitability.
Chinese AI developers have made rapid advances in large language models and other AI systems, but converting those products into recurring commercial revenue remains a major challenge. Lower pricing, intense domestic competition and high infrastructure costs can put pressure on margins even as demand for AI services grows.
For companies such as DeepSeek, an IPO could provide a larger and more durable pool of capital than private fundraising alone, while giving the company resources to scale computing capacity and compete for scarce technical talent.
Talent Retention Adds Pressure
DeepSeek’s need for capital also extends to employee retention. Liang hopes proceeds from a potential IPO would allow the company to offer stronger incentives to researchers and other key employees, according to one of the sources.
The startup has recently lost talent to better-funded Chinese technology companies, including ByteDance and Xiaomi, the source said.
The competition for AI researchers has become increasingly intense as technology companies seek specialists capable of developing foundation models, improving inference efficiency and designing the computing infrastructure needed to run AI systems at scale. The competition is contributing to a broader increase in AI costs. Companies are spending heavily not only on chips and data centers but also on compensation packages designed to prevent experienced researchers from moving to rivals.
DeepSeek’s reported decision to pursue a STAR Market listing therefore comes at a critical point in the company’s development. Its breakthrough AI models helped establish it as one of China’s most closely watched AI startups, but maintaining that position will require sustained investment.
An eventual IPO would give DeepSeek access to China’s public equity markets and potentially strengthen its ability to finance model development, computing infrastructure and employee retention.
The listing is also expected to provide a public-market valuation for one of China’s most prominent AI companies at a time when investors are trying to determine how much value the country’s AI sector can ultimately create.