DeepSeek frenzy leaves China’s venture capitalists on the AI sidelines

Name: Does the arrival of China’s low-cost DeepSeek mean the end of Nvidia’s chip dominance?
Uploaded: 2025-02-11T01:00:21.000Z
Duration: 5 min
Description: Does the arrival of China’s low-cost DeepSeek mean the end of Nvidia’s chip dominance?

DeepSeek founder Liang Wenfeng once said that Chinese venture capitalists were hesitant in backing pure research projects

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DeepSeek’s surprising rise has left China’s top venture capital firms without a stake in the country’s hottest AI start-up. Photo: Shutterstock

Wency Chenin Shanghai

Published: 9:00am, 11 Feb 2025

China’s venture capital (VC) firms have been sidelined in the frenzy surrounding DeepSeek, with none of them known to have invested in the open-source large AI model developer.

Baidu Venture, an independent AI-focused investment arm initiated by its namesake Chinese internet giant, did not invest in DeepSeek even though the venture company sits just one floor above the start-up’s Beijing office.

DeepSeek, spun off from one of China’s top hedge funds High-Flyer Quant in 2023, did not say it was in need of external funding, according to Baidu Venture’s chief executive and managing partner Gao Xue.

“High-Flyer’s AI large model business has no plans to raise capital, so like other VCs, we haven’t had the good fortune of becoming a DeepSeek investor,” Gao told a local news outlet.

The two firms had established contact and maintained “friendly interactions” since DeepSeek moved into the same building last May, he said.

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Does the arrival of China’s low-cost DeepSeek mean the end of Nvidia’s chip dominance?

Alibaba Group Holding, an active investor in Chinese AI start-ups from Moonshot AI to Minimax, also did not invest in DeepSeek, although both companies are based in Hangzhou, capital of eastern Zhejiang province.