DeepSeek, one of the most promising AI startups in the world, is taking an unconventional approach to funding. According to a report by the Wall Street Journal, founder Liang Wenfeng is resisting outside investment, opting to maintain control over the company instead.

This decision comes as a surprise, given the intense interest from venture capitalists and investors. Unlike its counterparts, DeepSeek has not announced any mega-rounds of funding, despite its groundbreaking AI model that took Silicon Valley by storm earlier this year. Rumors about supposed investors have even fueled rallies in some Chinese stocks.

A closer look at Chinese corporate records reveals that DeepSeek is 84% owned by Liang himself, with the remaining 16% held by individuals affiliated with his hedge fund, High-Flyer. This unique ownership structure allows Liang to maintain control over the company, unlike most startups that require outside capital and are thus subject to external influence.

In a 2023 interview with Chinese media, Liang expressed his disdain for venture capitalists' focus on rapidly monetizing AI, rather than prioritizing fundamental research. This sentiment suggests that Liang is more interested in pursuing his vision for AI development than in accepting outside investment that might compromise his control.

DeepSeek's ability to self-fund through High-Flyer's profits has reduced its need for outside investment. Liang has stated that "money has never been the problem for us; bans on shipments of advanced chips are the problem." This highlights the company's unique position, where access to advanced chips is a greater challenge than securing funding.

However, accepting investment from Chinese entities could deepen trust and privacy concerns. As a Chinese company, DeepSeek operates under strict Chinese laws that grant the government broad data access. This has led to bans from several governments and private companies, which could worsen if DeepSeek accepts funding from a Chinese investor.

Despite this, some Chinese state entities have approached DeepSeek for investment, although there is no indication that the company has accepted any offers. The U.S. government has a history of sanctioning Chinese tech companies it deems too close to the Chinese government, which could further complicate matters.

However, this doesn't mean that DeepSeek will never raise outside capital. The company's recent announcement of a theoretical profit margin signals a shift toward monetization, which could attract venture capitalists. Additionally, DeepSeek may need access to more and better AI chips to keep up with other AI heavyweights, which could require outside investment.

DeepSeek's ability to self-fund may also be fading, as High-Flyer's flagship funds have underperformed since 2022. Furthermore, the Chinese government's crackdown on quant funds like High-Flyer since 2024 could impact DeepSeek's funding situation.

While few concrete names are circulating, DeepSeek has already drawn interest from prominent investors like Tencent and Alibaba. The company did not immediately respond to a request for comment.

In conclusion, DeepSeek's founder Liang Wenfeng is prioritizing control over his AI startup, resisting outside investment despite intense interest. This unique approach may allow DeepSeek to maintain its independence, but it also raises questions about the company's long-term sustainability and ability to keep up with its competitors.