- Citigroup’s co-head of global equity capital markets, Aloke Gupte, says investors will become more selective on IPOs as concern about AI data center funding spreads. He said these businesses will need to keep raising capital, so buyers will be “more discerning around who to back.”
- Data center volatility has been sharp this month. CoreWeave, the largest neocloud, is down about 30% with its bonds at distressed levels, while DayOne Data Centers is weighing a delay or size cut for its US IPO.
- Global IPOs, placements and block trades have raised more than $840 billion so far this year, the most since 2021, led by the US and Asia. Rising bond yields and poor deal performance have made both issuers and investors more cautious.
- Gupte sees November, after the US midterms, as the next test, with Anthropic also targeting a listing next month. He expects deal flow to ramp up again next year, describing AI as a “supercycle” for equity capital markets.
What Happened?
In an interview in Hong Kong, Gupte told Bloomberg that recent events in the data center sector are being closely watched and will make IPO investors more discerning. Citi ranked first in global IPO underwriting for the year through September. Gupte said issuers are still moving forward with listing plans, which points to strong fundraising in 2027. He cited Schneider Electric’s €6 billion share sale and a $1.8 billion convertible from United Microelectronics as proof that large deals are still getting done.
Why It Matters?
The comments come from the top-ranked IPO underwriter, so they carry weight for any US neocloud or AI infrastructure company planning to list. The key point is that these businesses are serial capital raisers, which means a weak debut or falling share price raises the cost of every future raise, not just the IPO. CoreWeave’s slide and distressed bonds give investors a live example of that risk. Anthropic’s planned listing adds another factor, since some investors expect it to absorb capital that might otherwise go to smaller offerings. For public neocloud shareholders, tighter primary markets could limit funding options just as buildout costs rise.
What’s Next?
Watch how US issuers price and size deals after the midterms in November, which Gupte called the next test. Any update on DayOne’s US IPO will be an early signal of how much room there is for data center listings. Anthropic’s debut, if it proceeds next month, will show whether demand for AI equity is narrowing toward the largest names.
Affected Tickers and Coins: C, CRWV, IPO
Source: Bloomberg
