Chinese AI companies are valued at 425 times their sales in public markets while being sold at a massive discount in private deals.
April 25, 2026
Original Paper
The 425× Premium and the 85:1 Discount Are the Same Trade: A Partition Framework for Pricing Chinese AI Equity Across Private and Public Markets
SSRN · 6621378
The Takeaway
The exact same technology can be priced wildly differently depending on where it is traded and who is buying it. Chinese frontier AI firms face a steep discount in private markets compared to their peers in the United States despite having similar technical capabilities. At the same time, public retail investors in China are paying an astronomical premium for these same companies. This massive pricing gap reveals a broken market where valuation has nothing to do with the actual quality of the software. Investors are essentially betting on the venue of the trade rather than the fundamental value of the artificial intelligence.
From the abstract
<p>This paper documents and explains a simultaneous pricing anomaly in the 2026 global market for Chinese frontier artificial intelligence (AI) equity. In private markets, DeepSeek is raising its first external funding round at approximately $10 billion, against OpenAI’s post-money valuation of $852 billion — an 85-to-1 ratio applied to two companies the 2026 Stanford AI Index places 2.7 percentage points apart on capability benchmarks. In public markets, MiniMax trades on the Hong Kong Stock Ex