The intense rush to invest in artificial intelligence developer DeepSeek has triggered the growth of a lucrative but risky secondary market, where prospective backers are paying substantial premiums for pre-IPO equity. According to a report by the Financial Times, the fervor surrounding the company’s fundraising efforts has created a ‘shadow market’ that significantly inflates valuations for those entering late.
Investors who missed out on earlier funding rounds are now turning to private share trading platforms to secure stakes in the Chinese AI firm. However, this demand has driven prices well above the company’s official valuation from its most recent primary raise. Industry observers note that these secondary transactions often carry a heavy discount for sellers but require buyers to absorb considerable markups, sometimes adding 30% or more to the cost of ownership.
The phenomenon highlights the broader competition among global technology giants and venture capital firms to gain exposure to leading AI models. DeepSeek has gained international attention for its cost-efficient approaches to large language model development, challenging the dominance of Western counterparts. As the company potentially moves toward an initial public offering, the liquidity and pricing dynamics in this unofficial market are expected to remain volatile.
Financial analysts warn that while the shadow market provides an exit route for early backers and seed investors, it introduces significant risk for new participants. The premiums paid in these private trades may not be recoverable if the eventual IPO pricing is set lower or if market sentiment shifts. Nevertheless, the appetite for DeepSeek shares demonstrates the extreme scarcity value attached to top-tier AI assets in the current investment landscape.
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