DeepSeek Hires CITIC Securities to Prepare Shanghai IPO

DeepSeek has hired CITIC Securities to prepare for an initial public offering on Shanghai's STAR Market, according to Reuters, which cited two unnamed people with knowledge of the matter. The Hangzhou-based AI company aims to begin the IPO process sometime this year. The timing of any offering, how much DeepSeek wants to raise, and its target valuation have not been determined, Reuters reported. DeepSeek and CITIC did not respond to requests for comment.

Under Chinese rules, companies pursuing a mainland listing generally have to retain a securities firm for pre-IPO tutoring before filing an application. That means the CITIC arrangement is a real step forward, not just talk. It's still far from a formal filing.

Why DeepSeek Needs the Money

DeepSeek is burning cash fast. The Information reported the company generated about 475 million yuan ($70.7 million) in revenue during the first seven months of 2026, roughly ten times its full 2025 revenue, while racking up a net loss of about 715 million yuan over the same stretch, according to IBTimes Singapore. Gross margin came in at 44.6%, with API sales alone hitting an 82.9% margin, per people familiar with the company's financials cited by The Information.

A person familiar with the matter told Reuters that founder Liang Wenfeng sees the IPO as a way to build a compensation structure that can hold onto DeepSeek's top engineers. The company has already lost talent to ByteDance and Xiaomi. DeepSeek also raised prices on its V4-Flash and V4-Pro API models in August, with hikes ranging from 50% to more than 1,100% depending on the model and time of day, according to Quartz, a clear sign compute costs are squeezing margins.

Separately, DeepSeek is planning a major buildout of domestic compute, with at least 160,000 Huawei Ascend 950DT AI accelerators reportedly earmarked for a gigawatt-scale data center in Inner Mongolia, according to people familiar with the project cited by TechNode. That cluster is intended mainly for AI inference, not training, and its actual deployment depends on Huawei's chip production capacity, TechNode reported.

The Funding Picture Is Messier Than the Headlines Suggest

DeepSeek is currently raising a fresh funding round at a 500 billion yuan ($75 billion) valuation, Reuters reported. That's up sharply from the roughly $50 billion post-money valuation it hit in June after closing a $7.4 billion round. In that June round, Liang personally put in 20 billion yuan, while Tencent Holdings and battery maker CATL contributed 10 billion yuan and 5 billion yuan, respectively, becoming the company's largest outside shareholders.

But IBTimes Singapore reported something the other outlets in this batch skipped: DeepSeek temporarily suspended that second fundraising round in July after private comments attributed to Liang Wenfeng circulated online, citing people familiar with the matter cited by Bloomberg and Reuters. Whether that round has since resumed at the reported $75 billion figure isn't clear from the available reporting. Investors betting on that number should know the round hit a real speed bump just weeks before this IPO news broke.

A Reasonable Skeptic's Case

A fair critic could point out that DeepSeek's own financial figures, the ones underpinning its climbing valuation, come entirely from unnamed sources and leaked filings, not audited public disclosures. China's STAR Market, unlike many Western exchanges, explicitly permits unprofitable tech companies to list and allows weighted voting rights, a structure that would let Liang keep control of the company even as outside money pours in. None of that is illegal or even unusual for the STAR Market, which was built for exactly this purpose in 2019. Investors are being asked to value a loss-making company on numbers nobody outside the company and a handful of reporters has independently verified.

DeepSeek Is Small Next to U.S. Rivals

Even at $75 billion, DeepSeek remains a minnow next to its American competitors. Some investors told Reuters they expect Anthropic's IPO to carry a valuation as high as $2 trillion, and OpenAI is reportedly targeting up to $1 trillion for its own planned listing. The gap reflects a difference in revenue. American AI labs are pulling in enterprise contracts at a scale Chinese firms simply haven't matched yet, according to Reuters' reporting on investor expectations.

DeepSeek isn't alone in racing toward public markets. Z.AI and MiniMax already listed in Hong Kong earlier this year, with Z.AI carrying a market cap of roughly $54 billion, per the Economic Times. Beijing-based Moonshot has filed confidentially for a Hong Kong IPO at a $50 billion valuation, Reuters reported. DeepSeek's choice to pursue a mainland Shanghai listing instead of Hong Kong, where most Chinese AI peers have gone, stands out. This could reflect a preference for state-linked mainland capital, though no source in this batch confirms that motivation officially.

Does China's securities regulator move fast enough to let DeepSeek actually file this year, and does the paused funding round close at the reported $75 billion figure before that happens? Neither has been answered yet.