00:00Jamie, I think in this moment, this is a market that was feeling the nerves of the success of
00:04Chinese open source models. And I wonder what does it do to a lot of the companies that you're
00:09speaking with looking to IPO when you have not only that threat, but also those companies going
00:14public in Asia? Sure. Well, you know, there's a great deal of anticipation about all of the LLM
00:20opportunities coming to market. And when I talk to investors and I get a sense of where they are
00:27focused, they're very much focused on the opportunity of AI and where basically all of
00:31these hyperscalers and the models are really chasing demand that's already there. And so
00:35I think there's going to be a market opportunity for several opportunities out there in the market
00:40as we go forward. I mean, the pipeline looks really robust. Everything from Anthropic, OpenAI,
00:46maybe we don't get that this year, but even so, where are we in the cycle? And can we even
00:49call it a cycle right now? Or is this kind of like a one-off with all these giants just
00:53rushing to
00:54market? Yeah, we can call it a cycle. Historically, when you look at these IPO cycles, they tend to
01:00last five to six years once you get that first up year from the trough. That would put us in
01:05about
01:05year three right now. We had 16 tech IPOs last year. We're at eight so far this year. I think
01:12in
01:12all likelihood, we have the highest mandated pipeline we've had in over six years. I think that actually
01:17we will likely exceed last year, certainly much higher on volume. And the breadth of that pipeline is
01:23the best I've seen in my career. Really? Because one would assume that it's just like all AI companies.
01:29So what exactly does the breadth look like? How many are AI, AI adjacent, or even things like software maybe?
01:35Look, I would go as far as to say we're on the verge of a golden age of innovation. When
01:41I look at the pipeline,
01:42it's not just AI, AI, LLM companies, but you have the power, you have compute, you have the data center
01:50and infrastructure around that. You're going to have actually application software as a part as well.
01:55And then you go a layer lower, it's robotics, automation. Those are actually opportunities as an
02:02offshoot of that. And then we have areas like defense tech and space, which are huge opportunities
02:06the next couple of years. Blockchain, quantum. I mean, it's in my career, I haven't seen this many
02:12innovation cycles actually happening all at the same time like this in the past.
02:16Are investors well enough received to that, that it's not just the golden age of innovation,
02:20but it also means it's the golden age for tech IPOs? Yeah, I believe so. I mean,
02:25the reality is there's a scarcity of growth in the public markets. If you look at how many tech
02:31companies are growing at least 30% in the market and expected to grow 25% this year, out of
02:36all 6,175
02:38US listed companies, all of 17 are growing at that rate. So the reality is the IPO pipeline
02:44will actually fill a lot of that gap. There's a lot of anticipation for high growth to come.
02:49See, that's really interesting because there also has been this narrative that's maybe a bit
02:52orthogonal to that. And it goes something like not even just a scarcity of growth, but just scarcity
02:56of public equities, scarcity of tech companies as so many of them have been able to remain private
03:01for longer. Is there a fear that that switches when you do get a lot of supply coming on that
03:06the market won't be able to absorb the level of supply that we're expecting? Yeah, it's a topical
03:11question for sure. We believe that there's plenty of capacity in the market to absorb these. And
03:17there's a few reasons why. Number one, if you look at the global equity market cap, we're up to 165
03:22trillion. Last time we had an IPO peak in 2021, that was 120 trillion. So we're up 40% in
03:29that
03:29respect. If you look at the average daily trading volume in the markets, it's about 140% higher than
03:35what it was at that time. And you have $8.3 trillion in money market funds on the sidelines.
03:40That was five back then. Can you ask how competitive are these bake-offs right now? I know something like
03:45a SpaceX, you know, it's huge. So it has, you know, you, Morgan Stanley, Goldman, they all come together.
03:49But these other deals that you're in the market for, are they more competitive than usual just
03:54because of the attractiveness of some of these companies? Oh, it's always been a competitive
03:58market, right? And on the book runner front, I mean, I think that's where real judgment and advice
04:03matters in picking book runners. But of course, it's competitive. And there's, there's more and
04:08more companies that are exciting that we're going to bring to market. By the way, has it changed
04:11anything? So I think a lot of people were very excited about SpaceX coming to market, the biggest ever
04:16IPO, and then it opens up the doors for everyone else to follow an IPO. Does it make a difference
04:20at all when you see SpaceX trading below their IPO price? Does that in turn give anyone cold feet
04:25when you see some of the price action? Yeah, not necessarily. I mean, there's so much excitement
04:31around what's to come. And you're not likely to get more tech IPOs until about the September
04:36timeframe anyway. So there's time and there's in the very short term, you know, in this month,
04:41we've seen high momentum as a factor retrace, right? That was after the best, basically first
04:46half that it's actually ever had in history. And so there's a little bit of give and take in the
04:51short term, but there's such a pent up demand for these private companies that are doing well,
04:57that we think will be public companies. I don't see that necessarily getting in the way.
05:01Can software companies still come public in this environment?
05:03Sure, sure.
05:04Do you have any in the pipeline?
05:05We do. We do. Look, I do think there's a burden of proof on software to prove either that you
05:10have an
05:11AI tailwind that's showing up in the numbers or that you have a defensible business with a good
05:16competitive moat to that AI threat. That's absolutely needed to come public right now.
05:20But we do see opportunities in software in multiple different areas. You've actually seen too,
05:26you know, into April was a monolithic sell off in software companies on the AI threat.
05:32You're now actually starting to see investors really parse the waters there and say, okay, well,
05:36if you're a cyber security company or if you're infrastructure software,
05:39you might actually have nice tailwinds from AI. And so we're at the point now where the market is
05:42starting to delineate between those two things. And there's definitely opportunity.
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