Xiao Daqi was born in 524, to Xiao Gang (who was then the Prince of Jin'an) and his wife, Princess Wang Lingbin (王靈賓). Xiao Daqi's uncle Xiao Tong, the first crown prince of his grandfather Emperor Wu, died in 531, and Emperor Wu created Xiao Gang crown prince instead. In 532, as the crown prince's oldest son, Xiao Daqi was created the Prince of Xuancheng. In 548, when the general Hou Jing rebelled and sieged the capital Jiankang, Xiao Daqi was given a general title, but did not appear to actually command troops. In 549, during peace negotiations that Xiao Gang entered with Hou, Hou was demanding that Xiao Daqi be sent to him as a hostage, but that term was never agreed to before peace negotiations collapsed over other issues. Hou subsequently captured the city, taking Emperor Wu, Xiao Gang, and other members of the imperial household, including Xiao Daqi, as hostages. Later that year, when Emperor Wu died, Xiao Gang succeeded to the throne (as Emperor Jianwen), albeit under Hou's control, and Emperor Jianwen created Xiao Daqi crown prince. (Xiao Daqi's mother Princess Wang also died in 549, without having been created empress, so presumably she died before Emperor Wu did.)