Morgan Stanley co-president: AI spending not slowing as Anthropic IPO looms

Dan Simkowitz, co-president of Morgan Stanley, stated that efforts by OpenAI and Anthropic to decelerate the rollout of cutting-edge AI models will not curb demand nor the investment that supports it.

Morgan Stanley is reportedly the lead underwriter for Anthropic’s forthcoming IPO. Speaking with CNBC on Wednesday, Simkowitz avoided commenting on specific transactions.

AI Spending and Its Funding to Persist

Simkowitz noted that expenditure on computing power and semiconductors continues unabated, as does the capital raising for that infrastructure.

“I think the pause or the slowing of release on the frontier really doesn’t change the core dynamics,” Simkowitz told CNBC.

According to Simkowitz, both corporate clients and individual users are generating demand. Morgan Stanley, he added, is expanding its use of AI in research, cybersecurity and customer service operations.

Morgan Stanley's partners include Anthropic, Google, xAI and Microsoft. Sam Altman gave a presentation to the bank's board in May 2022, a few months before ChatGPT was introduced.

Simkowitz indicated he is unaware of the timing for Anthropic's public listing. He described the IPO market as prepared for sizable transactions and cited SpaceX as an example.

His concerns lie in other areas, he said. Simkowitz pointed to fiscal policy, $100 crude oil and the $40 trillion U.S. federal debt.

Morgan Stanley Advises Top AI Investors

When questioned if investment might dry up, Simkowitz enumerated the clients he advises.

“We’re the advisor to Nvidia and Broadcom and Google and the and the LLMs, uh as well as some of the neo clouds. They’re all raising the capital”

Neoclouds are data-center companies that lease AI compute capacity. Large language models (LLMs) are the technology underlying chatbots like ChatGPT and Claude.

That roster includes the chipmaker, the networking provider, the search company and the AI labs. Morgan Stanley is reportedly one of the banks leading Anthropic's IPO, together with Goldman Sachs and JPMorgan.

ANTHROPIC COULD FILE FOR $2T+ IPO AS SOON AS NEXT WEEK

Morgan Stanley is in pole position for the lead-left role, while Goldman Sachs is expected to serve as stabilization agent, per FT.

JPMorgan, Citi and Barclays are also expected to receive leading roles.

Anthropic is…

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Anthropic's valuation was approximately $965 billion as of May, and its IPO is expected in the autumn.

Simkowitz also noted that Alphabet and SpaceX raised nearly $150 billion in equity during June.

Timing of Slowdown Request Faces Skepticism

On September 12, Anthropic CEO Dario Amodei called on competing labs to decelerate improvements in AI capabilities. Sam Altman and Elon Musk supported his request.

Two days later, investor Michael Burry contended that the slowdown initiative is aimed at boosting the IPOs rather than ensuring safety. He characterized it as excitement surrounding the public offerings.

Altman has subsequently delayed OpenAI's own IPO beyond 2026.

Simkowitz stated that each firm will decide on its own timeline.