Beijing – The breakthrough of the Deepsek artificial intelligence has aroused the Chinese world of risky capital after three years.
As Deepseek posted his rival Openii At the end of January, AI Discovery Company Insilico Medicine completed the Financing Circle of the ENGINE END OF $ 110 million led by Hong Kong based in Hong Kong The value of the partnerCEO and startup founder Alex Zhavoronkov told CNBC in an exclusive interview. The deal closed last month.
But so many Chinese funds wanted to participate in the last moment – “like an avalanche” – that Insilico plans to “E2” the raise series, Zhavonkov said. “We have never seen this level of interest before.”
Qiming Ventures supported Insilico uses AI from Deepseek and other companies to create models for drug development. Ten startup drugs have already received approval for clinical tests, according to Insilico, which cites research laboratories in China, USA -II to the Middle East.
Zhavinkov added that during their American trips, many American and other global investors have asked how to invest in the Chinese AI companies in the last few weeks.
“It looks like a deep moment, he created a great interest in global investors to invest in the cinema,” he said on Monday. “I think financing will come back.”
Regulatory uncertainty and in China and in the United States, especially around IPO, and slow economic growth contributed to the rapid decline in the activities of Chinese risky capital in recent years. The VC investment in the Chinese company has fallen for the last three years, reaching only $ 48.86 billion in 2024, which is the lowest record in at least 2016, according to Pitchbook.
Now, as regulatory clarity occurs, feelings are changing and stimulating investors to a different approach to the past, when online startups like Alibaba have emerged.
“People are just rushing to find the next Deepseek,” said Annabelle Yu Long, founder and managerial partner Bai Capital -Au Beijing. She also sits on the board of the tapestry for the parents of a coach.
“Everyone invests investments, but I ask my team to hold on to new offers because we see our basic portfolio [of around 6 companies] They get a very, very significant attraction of AI, “she said, noting that her company decides to increase investment in existing stakes in the coming months.
Part of her call comes from her opinion that Chinese means have far fewer capital than us to invest in AI, demanding a targeted approach. Instead of watching new startups, Long said she expects entrepreneurs who already use AI well to succeed in the near future.
For example, Black Lake Bai Capital, which sells production management systems, has become profitable in this quarter because AI has reduced services costs, Long said. Another of her investments, a health company called Lejian, has become more profitable with the help of Ai, and Goldman Sachs is preparing her IPO, she added.
Long said she plans to list nine portfolio companies this year, mostly in Hong Kong, and has received many calls from international investors about Chinese economics and Chinese entrepreneurship outside AI. “I definitely see the return of confidence.”
Other recent investment circles also reflect that the capital of the crowd in existing players. Insilic’s Zhavoronkov said some Chinese investors had lost almost all their money on the startups of AI drugs earlier, and now they recognize that they will only make a few, probably established players.
This month, AI Model Zhipa AI has collected an equivalent of about $ 137.68 million from Alibaba Cloud and a Fund supported in Hangzhou, according to Pitchbook of 12 AI contracts for the first 10 days of March. The data also showed that the Limx Dynamics robotics company raised an undiscovered amount from Alibaba Group and other investors.
Point for holidays
Chinese Lunar New Year at the end of January marked a a turn to invest AI. The Deepseek model R1 came out just before the holidays, while the state media broadcast a widely broadcast spring festival gala with unitree dance robots.
“I think Unitree and Deepseek encourage many foreign investors to try to look for opportunities here,” said Hongye Wang, the Shenzhen Executive Director based in Shenzhen based in Shenzhen, who has the funds denominated in the US dollar and Chinese Juan. He noted that some funds in the Middle East had recently sought opportunities in Chinese AI companies.
“I believe in confidence [is] Returning, “he said about the domestic VC, noting that many were traveling to meetings again.
Wang said his company had invested in a company that produces a cellphone and AI glass chargers and seeks opportunities in humanoid robots, along with companies that provide solutions to computing explanations. Forebright, which Wang says has several billion US dollars under the administration, plans to invest at least five to six investments this year, he said.
Support for politics
What is important for a market that hit regulatory actions, Beijing signals clear support.
“The fact that President XI [Jinping in February] shuddered The hand of the founder of Deepseek And it has been quite a green light for the generative ai to use on the scale, now you should expect a huge number of clones similar to deep letters … This will jump out and just find out what they have been doing in the last three years, “Zhavinkov said.
Last week’s work report says China will say that China will “accelerate the development of risk capital and growth of the patient’s capital”, referring to long -term investment.
The day after presenting the plan, Zheng Sharnie, head of the National Development and Reform Commission, told reporters that the Central Government was planning a fund that is expected to mobilize 1 trillion Juan ($ 137.7 billion) for technological investment. Central Bank Pan Gongsheng Governor has announced at the same press conference that a technological innovation loan program will almost double on as many as 1 trillion Yuan.
“From investment in the early phase to the exit, the politics is more complete and clearer,” said Liu Rui, Vice President of China Reneissance Capital, translated by CNBC on Mandarin.
He expects more resources to go towards AI apps this year, given the faster drop in the operating costs of the model and the large Chinese consumer base.
Tension with USA – ranging from tariffs to technological limitations – there are obstacles to international investors who think, however, the possibilities of China AI.
Unlike US companies that can access the global market, Chinese will also harder to expand abroad with respect to the sensitivity of AI and data, said Xuhui Shao, a management partner based in a fallen Alta in Foothill Ventures. His company focuses on the US and does not invest in the cinema.
Even with the potential of the large Chinese market, foreign investors must understand the risks of investment in China, such as the limit of capital flow, Shao said. But he pointed out that “innovative breakthroughs” like Deepseek should not be a surprise, given that China has many engineers and scientists educated at colleges, who may represent half of the AI researcher at an industrial conference.
“I mean,” he said, “Competition always pushes the entire sector [to move] Forward and technology would not contain boundaries. “
