DeepSeek Reports 475M RMB Revenue in First 7 Months, Targets 500B RMB Valuation
DeepSeek reportedly generated approximately 475 million RMB in revenue during the first seven months of the year, representing a tenfold increase compared to the previous year. The company is also seeking a new funding round of 50 billion RMB at a target valuation of 500 billion RMB. The financial data highlights the commercial viability of DeepSeek's efficiency-focused AI approach, boasting a high API gross margin of 82.9% despite lower overall revenue compared to US rivals. This demonstrates that cost-effective model training and inference can lead to strong unit economics in the competitive AI market. Despite rapid revenue growth, DeepSeek recorded a net loss of 715 million RMB for the seven-month period, driven by a surge in AI infrastructure spending to 11 billion RMB. The company is also reportedly preparing for an initial public offering (IPO) in Shanghai next year.
## BACKGROUND
DeepSeek is a Chinese AI company founded in 2023 by quantitative hedge fund High-Flyer, known for developing open-weight large language models like DeepSeek-R1. The company gained global attention by training high-performing models at a fraction of the cost of US competitors like OpenAI and Meta. This approach has challenged the traditional high-expense paradigm of AI development.