❯ DeepSeek First Seven Months: $70.7M Revenue, API Gross Margin Hits 82.9%

FINANCIALSThe Information reports that DeepSeek generated approximately 475 million RMB ($70.7 million) in revenue in the first seven months of 2026, with a net loss of about 715 million RMB ($106 million). By contrast, full-year 2025 revenue was only about one-tenth of that seven-month total, with a full-year net loss of 935 million RMB. On an annualized basis, the loss is actually narrowing.

MARGINSOverall gross margin currently stands at 44.6%, while the API model-invocation business gross margin is as high as 82.9%. The gap between the two figures suggests the drag lies outside the API business — most likely inference costs from the consumer-facing free app and training amortization. Revenue comes almost entirely from the API: V4-Flash is currently priced at $0.14 per million input tokens and $0.28 per million output tokens, with cache hits another two orders of magnitude lower, plus peak/off-peak time-of-day pricing.

VALUATION GAPBloomberg reported on August 6 that DeepSeek has reopened its second funding round, targeting nearly $8 billion at a valuation of roughly 500 billion RMB ($74 billion), with Monolith among the prospective investors; as of May, that valuation range was still $45 billion. A $70.7 million revenue base supporting a $74 billion valuation puts the price-to-sales ratio at close to 1,000x. Meanwhile, both Zhipu and Alibaba are using its V4-Flash as the benchmark at their launch events. What investors need to reassess: does this company’s value sit on the income statement, or in its pricing power over the entire Chinese open-source camp?

▪ SIGNALThe 82.9% API gross margin proves the inference business itself can make money; the question has always been who pays for the free half.