China’s “Big Fund” is considering providing 65 trillion won in support to AI startup DeepSeek… valuation jumps to $4.5 billion

China’s core semiconductor investment fund is pushing to participate in the first round of funding for the deep exploration of artificial intelligence startups, with the company’s valuation reportedly soaring from $20 billion to $45 billion in just a few weeks.

The Financial Times of the UK on the 6th (local time) cited four sources saying that the National Integrated Circuit Industry Investment Fund (the so-called Big Fund) is attempting to lead the funding round for Deep Exploration, and major Chinese tech companies like Tencent are also discussing whether to make equity investments. $45 billion is approximately 65 trillion Korean won, which means Deep Exploration’s strategic position in China’s AI industry has significantly increased.

Deep Exploration released its AI model R1 last January, boosting its presence. According to sources, weeks before the funding discussions began, the company’s valuation was still around $20 billion, but despite not yet achieving full commercialization, its enormous technological potential became increasingly apparent, leading to a rapid rise in valuation. Founder Liang Wenfeng may also participate in investments personally, currently holding a reported 89.5% of shares through personal and affiliated companies.

What makes this discussion particularly noteworthy is the nature of the Big Fund. The Big Fund is a policy-based fund established by China to solidify its semiconductor self-reliance in response to U.S. restrictions and technological sanctions on advanced semiconductor manufacturing equipment. In 2024, through channels such as the central government, local governments, and state-owned banks, the third phase of the fund has been raised, totaling 344 billion yuan (about 73 trillion Korean won). Given that publicly supporting large language model operators has been rare, this investment review indicates that China is expanding its industrial policy scope to include not only semiconductors but also software and AI models, aiming for synchronized development.

Market analysts believe that if the Big Fund’s participation materializes, Deep Exploration’s leading position in China’s AI model development competition could be further solidified. The Financial Times predicts that such support could promote the coordinated development of China’s software, semiconductor, and AI model ecosystems. In fact, an investor revealed that Deep Exploration’s coding ability is rated as the highest level domestically, and competitors like Zhipu AI and Moonshade are reportedly also maintaining growth in sales. Recently, NVIDIA CEO Jensen Huang mentioned that if Deep Exploration prioritizes application on Huawei’s AI chips, it could have extremely adverse consequences for the U.S.

However, Deep Exploration, the Big Fund, and Tencent have not issued official statements regarding the inquiries. Nonetheless, this move is interpreted as a signal that China is attempting to enhance not only semiconductor hardware but also AI software competitiveness at the national level to counter U.S. technological sanctions. This trend could lead to a reassessment of the value of domestic Chinese AI companies and concentrated investment of strategic industrial policy funds in the future.