Chinese AI lab DeepSeek upended the artificial intelligence market following the release of its R1 large language model. 

Built on cheap, underpowered chips from Nvidia (NASDAQ:NVDA), the AI model surpassed the performance of established LLMs that used the chipmaker’s most-advanced — and expensive — accelerators. And because it is open-source, it threatened to turn the AI market upside down. 

In what promises to be a new age of powerful but cheap AI models available to the masses, investors are wondering how they can invest in DeepSeek stock and profit from this revolution.

How can you buy DeepSeek stock?

DeepSeek was incorporated in July 2023 by the Chinese hedge fund High-Flyer, which has about $8 billion in assets under management. Using Nvidia’s A800 AI chips that were designed specifically to get around the Biden administration’s ban on technology exports to China, DeepSeek’s V3 LLM was trained at a cost of about $5.5 million, a far cry from the $100 million spent on OpenAI‘s leading ChatGPT using top-tier H100 Nvidia chips.

Its performance was superior, too, beating ChatGPT, Meta Platform‘s (NASDAQ:META) Llama 3.1, and others, across numerous benchmarks.The next-generation R1 inference model advanced the technology even further to become the leading LLM.

This shoestring budget LLM is also open-source, meaning developers can modify its algorithm, fine-tune it, and build upon it. Future iterations hold the potential for explosive growth.

No foothold for investment

Unfortunately, DeepSeek is not publicly traded, even in China or in Hong Kong. That means there is no way to directly invest in the AI lab.

It also means you can’t buy an exchange-traded fund (ETF) that invests in foreign companies to give you second-hand exposure to the AI company. There also doesn’t appear to be plans for an initial public offering in DeepSeek’s immediate future.

Since High-Flyer, which was founded by Chinese entrepreneur and businessman Liang Wenfeng, is the owner and sole investor in the AI lab, you can’t buy into the business.

In an interview published last December on ChinaTalk, Liang said venture capital firms have been leery of investing in the business because they have an exit strategy that prioritizes quick-to-market commercialization. As a result, High-Flyer is funding DeepSeek itself.

He noted his High-Flyer fund has a large research and development budget with additional resources that can be redirected to building out the business.

In a separate interview, Liang noted, “Money has never been the problem for us” so DeepSeek has no need right now of outside funding. So buying into DeepSeek won’t be possible yet.

A workaround investment strategy

Even though a DeepSeek investment in 2025 is off the table, it doesn’t mean an investor still can’t profit from it. It will just require investing in stocks that could benefit from the AI lab’s rocket to fame.

DeepSeek Investment No. 1: Nvidia

As surprising as it may seem, Nvidia remains the premier AI investment today. Despite DeepSeek’s advances, demand for its H100 and the soon-to-be-released Blackwell accelerators will remain in high demand.

Nvidia’s profit margins may be narrowed if demand for lower cost chips heats up, but there are questions about whether DeepSeek actually had access to Nvidia’s H100 chips. It might not be as clear-cut as it seems.

DeepSeek Investment No. 2: Microsoft

Microsoft is a financial backer of OpenAI and has integrated ChatGPT throughout all of its products and services. It is possible the DeepSeek revelation may have derailed the potential for a successful IPO bid by the AI shop, but OpenAI could incorporate the findings of its rival and further enhance ChatGPT’s offerings

DeepSeek Investment No. 3: Palantir Technologies (PLTR)

Palantir Technologies (NASDAQ:PLTR) has been referred to as the best pure-play AI stock and its recent fourth-quarter earnings report showed both its commercial and government businesses are experiencing accelerated growth.

CEO Alex Karp told investors in his shareholder letter, “We are still in the earliest stages, the beginning of the first act, of a revolution that will play out over years and decades.”

DeepSeek Investment No. 4: Vertiv Holdings

Data centers remain at the forefront of the AI market and Vertiv Holdings (NYSE:VRT) is a critical supplier of infrastructure for the facilities. It offers installation, maintenance, and repair services for the equipment data centers use, as well as essential liquid cooling technologies as these facilities consume enormous amounts of electricity.

Key takeaway

DeepSeek may not be available for direct investment, but that doesn’t mean you can’t still profit from it.

What its advances show is that AI remains very much in its infancy. The technology has a long runway of growth, and investors can still cash in on the trends and innovations that are both here and yet to come.

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