Chinese technology startups are scrambling for fresh funding to capitalise on the growing excitement around AI, fueled by DeepSeek's AI breakthrough and President Xi Jinping's recent support for private enterprises. Companies such as AI-powered optics startup Rid Vision, brain-computer interface firm AI CARE Medical, and robotics maker Shanghai Qingbao Engine Robotics are among those seeking new onshore investments, according to venture capitalist Andrew Qian.

The surge in investment interest comes after a long period of stagnation in China's venture capital sector. New Access Capital, which has invested in several AI startups, noted that many businesses are now attracting both cooperation discussions and investment offers. The DeepSeek case has highlighted the rise of innovative Chinese tech firms, moving away from previous trends of copycat startups, and offering hope for a revitalised venture capital environment.

Despite the growing investor enthusiasm, challenges remain. The strict regulatory scrutiny of initial public offerings (IPOs) in China, coupled with heightened tensions between China and the US, complicate the prospects for exit strategies. Venture capital firms are particularly focused on AI-related businesses, with several companies in sectors like AI image generation and medical tech securing significant funding in recent weeks.

However, the overall fundraising environment remains difficult. Data shows a sharp decline in venture capital investments since 2021, and while investor sentiment has improved post-DeepSeek, concerns over the regulatory landscape and geopolitical tensions persist. Some analysts remain cautious about the near-term outlook for IPOs, especially for offshore listings.