Chinese tech giants Tencent Holdings and Alibaba Group are in talks to invest in DeepSeek, the AI upstart that recently started fundraising for the first time, according to four people with knowledge of the conversations.

DeepSeek, owned by Chinese hedge fund High-Flyer Capital Management, is now seeking to raise funding at a valuation of more than $20 billion, after its initial discussions with prospective investors generated immense interests, one of the people said. The Information reported on Friday that DeepSeek started talks to raise outside capital for the first time, targeting to raise at least $300 million at a valuation of at least $10 billion.