Chinese AI Startup DeepSeek, for the first time, is considering funding from external stakeholders. This change in direction has drawn the attention of major Chinese tech companies such as Alibaba and various other state agencies, according to Chinese news agencies The Information.

DeepSeek made headlines earlier this year by unveiling low-cost AI models that rival or even outperform their Western counterparts at a fraction of the cost. This breakthrough has sparked concerns about the United States’ competitive edge in the global AI race.

Executives at DeepSeek and its parent company, High-Flyer Capital Management, are reportedly discussing whether to shift the company’s focus toward building a sustainable revenue model, transitioning from pure research to a more commercially viable AI business.

In addition, DeepSeek's founder, Liang Wenfeng, recently held talks with Chinese President Xi Jinping about advancing China's technological capabilities. These discussions reflect the government's commitment to strengthening China's role in the global AI race, seeking to challenge the current U.S governance.

DeepSeek founder attends a rare Conference hosted by Xi Jinping

Just one week ago, the elusive founder of DeepSeek was seen at the Beijing conference, a rare meeting held by President Xi Jinping with some of the biggest names in China's technology attending the conference.

During the meeting, the president urged Chinese tech leaders to "show their talent" and be confident in the power of China's model and market.

It seems that Beijing needs the private sector more than ever. Big tech companies are perhaps the most reliable growth engine for a country that is combating persistent issues regarding youth unemployment, a stagnant sector, local government debts and deflation.

More importantly is the rule of technology in geopolitics. As the war between China and the U.S continues to rage on, the U.S government has been thinking of all the different ways to cut China off from advanced technologies, such as semiconductors and artificial intelligence.

Hence, China would have to think of ways to be self sufficient, and the Chinese government is currently offering all the support it can muster to support companies that are investing in these strategically important sectors.

Furthermore, China is also starting to show that the country's technological capabilities is much better than what is commonly perceived by competing countries such as the United States, especially since the emergence of companies such as DeepSeek.

One analyst said the meeting was a reflection of the Chinese government's concern that it is lagging behind the U.S when it comes to technology. Christopher Beddor, deputy China research director at Gavekal Dragonomics in Hong Kong, said

"It's a tacit acknowledgement that the Chinese government needs private-sector firms for its tech rivalry with the United States"