DiffuSpace raises hundreds of millions of yuan in record dLLM funding round
Shenzhen diffusion-language-model startup DiffuSpace has completed two consecutive funding rounds co-led by Matrix Partners China, Shunwei Capital and Legend Capital, with CAS Star, Huawei Hubble and Horizon Robotics among the followers. The company did not disclose the exact amount; reports describe it as "hundreds of millions of yuan," while TMTPost says the total is close to RMB 500 million and calls it a record for global diffusion language model (dLLM) funding. Founded in Shenzhen in May 2026 by HKU NLP lab co-director Kong Lingpeng and his PhD students Gong Sansan and Ye Jiacheng, DiffuSpace says its earlier Dream 7B model has passed 2.5 million Hugging Face downloads and that a larger next-generation dLLM is being trained for release and open-sourcing soon.
It is the largest funding round yet for diffusion language models, signalling that investors are backing a generation paradigm outside the dominant autoregressive approach, though commercial viability still depends on model results and deployment.