DeepSeek picks underwriter for Shanghai listing, sources say

Chinese AI startup DeepSeek is moving ahead with preparations for an initial public offering on the Shanghai stock market after selecting an underwriter for the listing.

According to Yonhap, Reuters reported Wednesday (local time) that DeepSeek has chosen CITIC Securities as its lead underwriter for a listing on the Sci-Tech Innovation Board, the Shanghai Stock Exchange's tech-focused market.

DeepSeek aims to begin the IPO process by the end of this year, according to multiple sources familiar with the matter. Companies pursuing an IPO typically select a securities firm before filing a listing application, so the firm can review and guide them on governance, financials and internal controls.

Reuters said the selection of an underwriter signals that DeepSeek's listing plans are indeed moving forward. However, the sources said the specific timing of the listing, the size of the offering and the target valuation have not yet been decided.

DeepSeek appears to be pursuing an IPO to secure funding for computing infrastructure, AI model development and talent acquisition amid intensifying competition among major Chinese and US AI companies.

Reuters reported in July that DeepSeek was in the process of raising new funding at a valuation of 500 billion yuan ($74.5 billion).

In June, the company raised about $7.4 billion through an investment round that valued it at more than $50 billion after the investment, according to Reuters.

At the time, founder Liang Wenfeng personally committed to investing 20 billion yuan, while Chinese IT company Tencent and CATL, the world's largest battery maker, invested 10 billion yuan and 5 billion yuan, respectively, becoming major outside shareholders, Reuters said.

Chinese and US AI companies have recently been moving to raise capital through stock listings. Chinese LLM developers Z.AI and MiniMax both listed on the Hong Kong stock exchange this year.

Beijing-based AI startup Moonshot AI has also confidentially filed for an IPO on the Hong Kong exchange, Reuters reported earlier this month.

Moonshot AI was recently valued at $50 billion in a fundraising round, lower than DeepSeek's valuation and below Z.ai's market capitalization of about $54 billion.

The valuations of Chinese AI companies still lag far behind the valuations their US rivals are targeting through public listings.

Some investors believe Anthropic, the developer of Claude, could be valued at up to $2 trillion in an IPO, while OpenAI may aim for a valuation of up to $1 trillion in its own planned listing, according to Reuters.

In addition, the valuation gap reflects a substantial difference in sales between Chinese and US AI companies, highlighting the difficulty Chinese AI developers face in converting competitive technology into revenue.

DeepSeek has reportedly also lost some staff recently to better-funded rivals such as ByteDance and Xiaomi.

Another source said Liang is hoping to use funds raised through the IPO to boost compensation and retain key employees and researchers.