According to Bloomberg, Chinese AI giant DeepSeek has abruptly suspended its massive second fundraising round following viral, leaked comments from its founder.

The Catalyst: During private investor meetings, billionaire founder Liang Wenfeng reportedly dropped some candid, uncomfortable truths: China is still lagging behind the U.S. in AI sophistication, and DeepSeek remains heavily dependent on Nvidia chips despite U.S. export controls.

Those remarks leaked and went viral across Chinese social media and local outlets like Yicai. In response, Bloomberg reports that a frustrated Liang verbally notified prospective backers to hold off, telling them that expected investment agreements will not be signed in the coming days.

This effectively pauses a follow-on round that was targeting a staggering $71 billion (480 billion yuan) pre-money valuation.

The timing is wild. DeepSeek just closed its $7 billion initial mega-round in June—backed by heavyweights like Tencent and CATL. However, Liang’s leaked reality check strikes a highly sensitive nerve in Beijing, directly countering the heavily promoted domestic narrative that China’s AI sector has already closed the gap with Silicon Valley.

What’s next?

This might just be a cooling-off period. Bloomberg notes that the situation remains fluid, and DeepSeek could easily revive the deal once the digital dust settles.