DeepSeek halts its USD 74 bn round weeks after a record raise

DeepSeek reportedly paused the second fundraising round that would have valued it at roughly USD 74 bn, telling prospective backers over the weekend they won’t be signing the agreements they expected in the coming days, Bloomberg reported Saturday. The company says talks may resume.

The timing is the tell. DeepSeek didn’t need the money in a hurry: it closed its first outside round only in June, raising USD 7 bn at about USD 50 bn in one of China's largest-ever startup financings, backed by Tencent, battery maker CATL, and a state-run national AI fund. The follow-on, targeting a pre-money valuation of at least CNY 480 bn, opened weeks later at a step-up aggressive even by US megaround standards, then stalled almost as fast.

The trigger, Bloomberg’s sources say, was founder Liang Wenfeng’s frustration over leaked online accounts of his remarks to first-round investors. In a transcript neither DeepSeek nor Bloomberg has authenticated, Liang reportedly argued that China’s real gap with the US in AI is computing power, not talent, and dwelt on the sector’s dependence on Nvidia chips.

The pause is a wobble, not a wall. DeepSeek is preparing an IPO on Shanghai's STAR Market, possibly this year, giving it a route to capital that runs through neither private backers nor another leaked-transcript risk.

What to watch: Whether DeepSeek revives the raise, presses ahead with the listing, or lets both ride while it builds out compute. It was chasing the follow-on to fund data centers and chips as its push into AI agents lifts demand, so the money still has somewhere to go.

MARKETS THIS MORNING-

Asia-Pacific markets traded lower this morning, signaling a volatile week ahead as investors await key interest rate decisions from the Federal Reserve, Bank of Japan, and Bank of England. A wave of big tech earnings is also on deck, with investors watching closely for clear returns on massive AI infrastructure spending.

THE CLOSING BELL-

The EGX30 fell 1.0% at yesterday’s close on turnover of EGP 9.6 bn (3.2% above the 90-day average). International investors were the sole net buyers. The index is up 27.7% YTD.

In the green: Rameda (+2.6%), Juhayna (+1.5%), and Orascom Investment Holding (+1.4%).

In the red: Valmore Holding -EGP (-2.6%), Raya Holding (-2.2%), and Fawry (-2.0%).