As OpenAI and Anthropic, which are pushing initial public offerings (IPOs) in the second half of this year, signal a head-to-head showdown, Wall Street investment banks have also launched a contest to lead the listings, setting up separate teams for each side.
On the 17th (local time), the Wall Street Journal (WSJ) reported that Goldman Sachs and Morgan Stanley are assembling separate dedicated teams in preparation for the possibility of handling both the OpenAI and Anthropic IPOs. They are building internal "firewalls" to block the flow of sensitive information between industry rivals.
According to the WSJ, staff at Goldman Sachs and Morgan Stanley who handled the SpaceX listing did not review the preliminary IPO filings of OpenAI and Anthropic. That is because SpaceX has an early-stage AI business and is classified as a competitor to the two companies.
The WSJ explained that it is rare for rival corporations to go public around the same time. In particular, in recent years it has been hard to find cases where competing corporations chose the same lead underwriter. Even when ride-hailing companies Lyft and Uber went public one after another in 2019, their underwriters were different.
This case shows how much Goldman Sachs and Morgan Stanley have expanded their clout in the tech IPO market. In particular, both OpenAI and Anthropic are considering mega-IPOs worth several billion dollars, making the participation of multiple investment banks inevitable. In the case of SpaceX, which listed last week, 23 banks joined the underwriting syndicate.
The industry is paying close attention to who will take the "lead left" spot as IPO lead underwriter. The lead left is the underwriter whose name appears first on the front of the securities registration statement and plays the key role of effectively deciding the allocation of IPO shares to institutional investors. Forbes reported that Goldman Sachs and Morgan Stanley are competing for the lead left position in the OpenAI and Anthropic IPOs.
Jay Ritter, an IPO expert at the University of Florida, said, "Institutional investors will try to maintain good relationships with both sides because they still do not know which bank will take the lead left."
According to Forbes, the market expects OpenAI and Anthropic could each raise $60 billion (91.668 trillion won). Combined, the two could raise more than $120 billion (183.336 trillion won). Applying the same fee rate as SpaceX (0.75%), total underwriting fees for the two IPOs would be about $900 million (1.375 trillion won).
Earlier this month, OpenAI and Anthropic filed confidential IPO applications a few days apart. The market sees listings as early as Aug., but expects listings after September, after Labor Day in the United States, as more likely.
The WSJ analyzed that the listing race between OpenAI and Anthropic is expanding beyond a simple contest between corporations into a power struggle among Wall Street investment banks. Forbes projected that competition between Goldman Sachs and Morgan Stanley will intensify because the lead underwriter can attract institutional investors' transactions to secure additional revenue.