DeepSeek triggered a wild, baseless rally for some Chinese stocks

Chinese AI company DeepSeek made global headlines for helping spark a massive sell-off in U.S. tech stocks on Monday, with Nvidia dropping almost 20%.

In China, the hype around DeepSeek has sent shares of some public companies with supposed ties to it soaring. The problem: There’s no evidence these companies ever invested in or cooperated with DeepSeek to begin with.

Rumored DeepSeek investors Huajin Capital and Zhejiang Orient popped by 10% on Monday, while a research company called Sublime China Information jumped 20% for supposedly cooperating with DeepSeek on its AI models. (Those are the legal maximum daily gains in Chinese exchanges.)

However, Sublime China Information denied cooperating with DeepSeek in a disclosure, and Huajin Capital denied to a Chinese business news outlet that it ever disclosed a DeepSeek investment. Investment company Zhejiang Orient hasn’t responded to a request for comment from TechCrunch, but there’s no public evidence that they’re an investor in DeepSeek, either. 

The rumors appear to have originated from unsubstantiated Chinese lists — which have gone viral — of various publicly traded companies supposedly tied to DeepSeek.

DeepSeek, a private company, has never publicly announced any VC investments, while Chinese corporate records make no mention of VC firms on DeepSeek’s cap table. Instead, its founder Liang Wenfeng is listed as the beneficial owner of all three entities that form DeepSeek. DeepSeek is funded by the quant firm High-Flyer (of which Wenfeng is CEO) and has no plans to fundraise, Wenfeng told Chinese media outlet Waves last year.

In a 2023 interview with the same outlet, Wenfeng said he had discussions with different funding sources, but VCs “seemed hesitant” about investing in a research-focused company, prioritizing commercialization instead.

DeepSeek did not respond to TechCrunch’s comment request.