In the high-stakes game of AI, where computing power, energy efficiency, and model optimization are paramount, players will scrutinize every resource. Who would be the likely investor in DeepSeek? Not Ali, ByteDance, or Baidu. Their options are limited to seeking pure capital or funds from large corporations whose AI ventures have already hit a dead end.

Why Would Ali Invest in DeepSeek When It Has QianWen?

Yesterday afternoon, whispers of a collapsed financing plan between Ali and DeepSeek surfaced unexpectedly. This was soon followed by reports clarifying that Ali had never been part of DeepSeek's financing discussions. Amidst this flurry of information, one can't help but ponder: does Ali really need DeepSeek?

In recent years, the AI sector has been rife with baseless financing rumors, almost on a daily basis. Last year, Ali and DeepSeek were already subjects of such debunked speculation. Similar rumors circulated about ByteDance investing in Baichuan and Yuezhi'anmian, and Tencent investing in Zhipu. Even Elon Musk's X was not immune, with reports of Microsoft and Google acquiring stakes over a year ago—all of which ultimately proved to be mere speculation.

The entire AI industry is currently in dire need of funding, and major players also seek to maintain their industry standing. Often, companies are too preoccupied or simply uninterested in addressing every rumor, choosing to remain silent unless absolutely necessary. After all, no real transactions are likely to materialize from these rumors.

There's a fundamental principle that's often overlooked: AI is crucial for every major company. They are reluctant to dilute their resources until they are truly at their wit's end. The key is to focus on their own AI development and maintain control.

A major corporation is akin to a powerful nation. Can a nation rely on external sources for its nuclear arsenal? What if those sources decide to cut off supply?

I once engaged in a similar discussion with the CEO of a renowned car company. I inquired about his stance on autonomous driving companies like Horizon and Momenta. His response was straightforward: any ambitious car company aiming to survive the next cycle must pursue in-house research. Intelligence and autonomous driving are the core competencies of future car companies. Outsourcing these would leave them with nothing to compete on—it's like not being able to build an engine in the automotive age; you can't even enter the race.

The same principle applies to today's AI landscape. Players like ByteDance, Ali, Baidu, DeepSeek, and Yuezhi'anmian are still in the game, but their relationships are intricate. Before QianWen's emergence, Ali might have considered investments, but now QianWen has become a formidable contender, even rivaling ByteDance. It makes little sense for Ali to divert funds to support DeepSeek.

In the Romance of the Three Kingdoms, Liu Bei stayed with Cao Cao briefly but ultimately left to establish his own domain. Why? Because while Cao Cao could offer shelter and honor, he would never provide money, grain, or territory. In the quest for supremacy, why would one invest in a rival to make them stronger?

Currently, QianWen and DeepSeek each have their technological strengths, with QianWen even surpassing in computing power, multimodality, and ecological comprehensive capabilities. Ali's investment in DeepSeek would be more wisely spent on enhancing its own R&D to widen the technological gap. If you already own a Dyson hairdryer, why buy a Panasonic?

Financially, DeepSeek's backers, Huanshang and Liang Wenfeng, are not lacking in funds. Their quantitative trading yields are impressive, and pure capital investors are eager to join. Players like Tencent, whose AI efforts are lagging, are more in need. Thus, Ali, a strong competitor, is unlikely to engage in negotiations.

We can roughly conclude that starting from 2026, AI players will meticulously evaluate every resource, considering efficiency in computing power, energy, and models. ByteDance, with its deep pockets, has already started charging for Doubao, making investment unlikely. The same applies to Ali and Baidu. If Yuezhi'anmian and DeepSeek seek funds, they'll have to turn to pure capital or large corporations whose AI ventures have already faltered.

In fact, there are numerous such corporations: Tencent, Meituan, JD.com, Pinduoduo, Didi, and Xiaohongshu, among many internet giants with substantial cash reserves. In Yuezhi'anmian's latest financing round, we witnessed Meituan's involvement.

DeepSeek is undoubtedly an attractive target for most traditional internet companies not yet in the AI arena. But what about Tencent or other companies? Are they more reliant on DeepSeek?

Although the rumor about Ali's investment in DeepSeek collapsing is just that—a rumor—the underlying market dynamics are clearly visible.

Ali and ByteDance are destined for an all-encompassing competition in the AI ecosystem, while DeepSeek represents a third force. Ultimately, whether the veterans prevail or the newcomers make an impact depends on their industry bets. After all, none of them are short of funds. QianWen is backed by Ali's e-commerce business, Doubao by ByteDance's Douyin, and DeepSeek has a pile of eager investors.

Ali is betting on infrastructure capabilities, ByteDance on a super-assistant route, and DeepSeek on model leadership and open-source, setting an example for domestic alternatives.

Different paths lead to different destinations.

The last connection between Ali and DeepSeek might be their shared base in Hangzhou.