Surge of US AI IPOs... Wall Street Forms Separate Teams Over Conflict of Interest Concerns
As major artificial intelligence (AI) companies such as OpenAI and Anthropic accelerate their plans to go public, Wall Street investment banks (IBs) are splitting their IPO teams out of concern for conflicts of interest. Since both companies operate in the same sector, there are worries that financial information and public offering strategies could be leaked between them.
The Wall Street Journal (WSJ) reported on the 17th (local time), citing sources familiar with the matter, that Goldman Sachs and Morgan Stanley are forming separate teams for the listings of OpenAI and Anthropic to prevent information sharing. Both banks are serving as the lead underwriters for OpenAI and Anthropic.
Investment banks take careful steps to avoid any potential conflicts of interest in all transactions, from IPOs to mergers and acquisitions (M&A). This is because companies expect a high level of confidentiality as advisors review financial information and devise strategies for investor presentations.
It was reported that the personnel at Goldman Sachs and Morgan Stanley who oversaw the SpaceX listing did not review the preliminary IPO documents for OpenAI and Anthropic. This is explained by the fact that SpaceX has early-stage AI businesses and is therefore considered a competitor to the two companies.
WSJ pointed out that it is rare for direct competitors to go public at the same time, and there have been only a few instances where they used the same lead underwriters. For example, in 2019, when ride-hailing companies Lyft and Uber both went public, JPMorgan Chase, Credit Suisse, and Jefferies managed Lyft's IPO, while Goldman Sachs, Morgan Stanley, and Bank of America (BofA) handled Uber's offering.
According to WSJ, this unusual situation demonstrates the enormous influence that Goldman Sachs and Morgan Stanley wield in the tech IPO market. OpenAI and Anthropic are also considering mega-sized offerings, which require a large syndicate of investment banks to execute successfully. In fact, SpaceX's offering involved 23 investment banks.
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Meanwhile, OpenAI and Anthropic submitted confidential IPO filings earlier this month. As a result, the two companies could begin the public offering process as early as August. However, sources said the actual offering is more likely to take place after Labor Day in the United States.
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