The idiom “feeding frenzy” gained prominence in the mid-century, first primarily to describe the behavior of sharks frenetically ripping into large schools of fish. It’s chaotic, ruthless, and triggered by the perception of abundance. And I suspect the phrase gained popularity both because it’s evocative, and because there’s more than one kind of shark out there. And right now, quite a few sharks are circling the secondaries market around Anthropic, which is widely expected to go public this year (as is rival OpenAI).

If you’ve missed the ruckus: Anthropic, the maker of Claude and last publicly valued at a now-quaint $380 billion, is raising a new round of funding—the company’s reportedly looking to rake in as much as $50 billion at a valuation in the $900 billion ballpark. And talking to brokers, investors, and founders about it, they all had the same, clear message: This is not normal. 

“Anthropic has all this clumped-up, pent-up demand, and it’s like a pressure cooker ready to explode,” said Hari Raghavan, an angel investor and founder who’s currently starting a new fund with longtime private capital markets executive Clara Vydyanath. “If you have pent-up demand and a lack of clean paths you can use to vent the exhaust, what happens is that the whole thing blows up.”

And the demand for Anthropic is explosive, four industry insiders agreed. At the start of this decade, Anthropic didn’t exist, and this year, the company’s ostensibly set to take in $45 billion. This reported (and eye-watering) figure appears to be annualized revenue run rate, which is definitionally dicey—it’s a snapshot-estimate of where revenue will land if recent pace holds. That number isn’t reality, not yet. 

But reality isn’t the driving force around the tidal wave of demand for Anthropic shares. It all started in late April, when Anthropic put out a call for investor allocations: The message? You want a block of Anthropic shares, you have 48 hours to submit the size of your offer. 

“In a normal funding round, it’s rare there’s such a call for allocations,” said Vydyanath, who was recently head of investments at Hiive and has worked in secondaries since 2018. “Much of that happens in private and by the time it hits the market, the round’s pretty allocated. This is the first time I’ve seen a company say ‘we’re now accepting bids to invest in us, because we’re such a hot ticket and can take our pick of all the capital.’”

Cue the chaos

It’s become clear there’s a comical amount of capital chasing Anthropic. One market insider (who spoke on the condition of anonymity due to LP sensitivities) did some back-of-the-napkin math: In one group of ten money managers, he counted $200 billion of inbound demand for Anthropic shares. On top of that, he sees between $1 billion and $2 billion each week of “I’m ready to wire $50 million to $100 million” style inbounds. By this person’s math, there could be as much as $1 trillion in capital chasing $30 billion to $50 billion in available shares. 

Cue the chaos. For Vydyanath and Raghavan, prospective investors flooded into their inboxes, as was the case for pre-IPO brokers across the private markets. These aspiring Anthropic backers are often family offices or their ilk, and sometimes haven’t participated in the private capital markets at all—but want their slice of the Anthropic action. But even in the situation where it appears there are shares to buy, figuring out if those shares are even real is its own challenge. 

Lots of secondary action these days is run through special purpose vehicles, or SPVs. Which means that hundreds of millions or perhaps even billions of dollars meant to go towards Anthropic is intermediated, sliced, and re-sold through layered vehicles, opaque intermediaries, and sometimes synthetic contracts. The secondary market is fundamentally unregulated, as are SPVs. So, all sorts of weird stuff happens: The same blocks of shares get shopped repeatedly by different brokers. And even in a two-layer SPV, you don’t necessarily even know who the actual Anthropic shares (assuming they exist at all) trace back to. SPV fee structures can also, frankly, get out of control. The market insider told Fortune they’ve seen several SPVs with more than four layers. 

“Total fees across the layers were more than 30% carry,” the person said. “There was a fixed fee of 20% one-time, plus 2% annual fees. And if you hold it for five years, that’s already 30% in management fees.”

And let’s be clear: There are plenty of ways to engage with the secondary market legitimately, even through SPVs. (And plenty of very legitimate investors use SPVs to invest large amounts of capital, and that has been common especially in the AI boom.) But what the Anthropic clamor reinforces is equally true: That there is a universe of sketchier brokers who want to charge huge fees to smaller, less-connected investors trying to cash in on the AI gold rush.

Anthropic’s tried to put the genie back in the bottle. The company in recent weeks updated a February bulletin that in no uncertain terms said: SPVs are not allowed and “invest at your own risk.” The company also named names when it came to unauthorized brokers. This was curious in some sense. For one, it’s common knowledge there are SPVs on Anthropic’s cap table, and the company has been updating the “unauthorized” list in recent days, taking off names like Forge and Lionheart Ventures. (Anthropic declined comment for this story.)

Embellishment, exaggeration, and misrepresentation 

There will be waves of fraud that emerge from the Anthropic secondaries morass. It just may not look how you’re expecting. And sure, there will likely be outright fraud in the vein of what we’re slowly starting to see the DOJ chase and prosecute. But a lot of it will involve intermediaries (who are either legal brokers or not) engaging in garden variety misrepresentation, either by design, carelessness, or just lack of knowledge. 

“I would say most of the fraud here is the way people lie on their resumes,” said Raghavan. “It’s embellishment, slight exaggeration.” Vydyanath agrees, noting the line: “I would draw a very firm distinction between fraud and misrepresentation. I think there’s not that much fraud, but a lot of misrepresentation.”

It’s important to say: the demand could ultimately be overstated in such an untracked market, where there’s no macro way of measuring anything for certain. 

But what seems clear to me is this: Reality will someday catch up, and a cornucopia of SPV buyers will realize that even if they bought the right company, they bought at the wrong fee structure, and from the wrong seller. Doctors, exited founders, and whoever else is standing on a golf course right now talking about their shares in Anthropic—they may end up with fewer shares than they expected, or will be so waterlogged by fees that any possible returns will get drowned.

I’ve found myself wondering if feeding frenzy is an ill-fitting phrase here. Because the term, in the literal marine life sense, implies abundance. And in this case, there’s both abundance and scarcity. Anthropic needs capital, and there is only one Anthropic. 

But perhaps the tension is what makes it the right term here—it all has to end sometime. No thrashing free-for-all is bottomless.