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Javier Lacort
Senior WriterI write long-form content at Xataka about the intersection between technology, business and society. I also host the daily Spanish podcast Loop infinito (Infinite Loop), where we analyze Apple news and put it into perspective.
Karen Alfaro
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DeepSeek, the AI startup sensation of the year, is defying the norms of the startup ecosystem. It stands out for its efficient AI model and its rejection of venture capital—something competitors depend on for survival. Founder Liang Wenfeng retains 84% ownership (an anomaly in the industry) and has no plans to relinquish control.
Chinese tech burst onto the scene in January with its new AI model. But unlike its competitors, DeepSeek isn’t announcing billion-dollar funding rounds—nor does it want to.
The three reasons. Liang has clear reasons for keeping investors at bay:
- He doesn’t want to lose control of his long-term vision for AI development.
- DeepSeek has ample funding through its High-Flyer investment fund.
- He fears outside investors, especially Chinese ones, could worsen privacy and security concerns.
Why it matters. In an industry where competitors are racing to secure billions to fund the costly AI boom, DeepSeek is taking an alternative approach.
Financial independence allows it to focus on research and development rather than the quick monetization investors often demand.
Between the lines. Liang has never hidden his distrust of investors. In a 2023 interview, he openly criticized VC funds for prioritizing rapid AI monetization over advanced research.
His stance reflects growing skepticism in the tech sector about whether traditional funding models align with the long-term development of transformative technologies.
The numbers. DeepSeek’s ownership structure is unusual for a high-powered startup:
- Liang owns 84%.
- Individuals associated with his investment fund, High-Flyer, hold 16%.
- Traditional outside investors hold 0%.
In detail. Liang created DeepSeek with profits from High-Flyer, his quantitative investment fund. “Money has never been the problem for us; bans on shipments of advanced chips are the problem,” he said in 2023.
This financial independence has allowed DeepSeek to grow without external pressure from investors focused on short-term growth metrics.
The background. As a Chinese company, DeepSeek operates under laws that grant the government broad access to its data. This has already led to bans on its use in several countries and private companies.
Bringing in Chinese investors could worsen the situation. The U.S. government has a history of sanctioning Chinese tech firms with government ties, such as Huawei and DJI.
What’s next? According to Liang, DeepSeek will need more and better AI chips to remain competitive. Due to U.S. export controls, those components are costly and heavily restricted in China.
Without outside funding, DeepSeek risks falling behind rivals with greater resources, such as OpenAI and Anthropic. Then again, if any company has proven its ingenuity, it’s DeepSeek.
Image | Solen Feyissa (Unsplash)
Related | How to Use DeepSeek: 36 Features and Tricks to Get the Most Out of This AI Model
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