Goldman's $210 Billion Day Of Deals Driven By AI Financing Fever

The Wall Street bank co-led Meta Platforms Inc.'s $95 billion share offering, was the sole structuring agent on a $40 billion SpaceX chip financing deal and was named lead-left bookrunner on Anthropic PBC's blockbuster initial public offering - which is expected to be at least as big as SpaceX's listing in June.

Those big deals, totaling at least $210 billion, are a boon for Goldman, which is likely to see a windfall worth at least tens - if not hundreds - of millions of dollars for its work.

Goldman's prominent position on the Anthropic IPO came as a surprise to some, after Morgan Stanley has led work expanding the AI firm's debt revolver facility. Goldman's relationship with Anthropic is led by San Francisco-based bankers Nick Giovanni and Jung Min, who's also a top banker to Nvidia Corp., a person familiar with the matter said.

A representative for Goldman declined to comment.

ALSO READ | SpaceX Agrees To $40 Billion Chip-Financing Deal With Apollo

Wall Street has been racing to finance the AI frenzy, which includes the surging demand for chips and data centers to provide computing power needed to back the technology. But the rising levels of debt and equity pouring into the space, along with cash burn at frontier AI labs, have raised worries that some of the financing could be unsustainable.

Those mounting signs of concern are showing up in the debt and equity of companies including CoreWeave Inc. Shares of some neoclouds - companies that provide computing power to firms building and running artificial intelligence models - have slumped in the past month.

While Wall Street banks haven't detailed the fees directly tied to the AI boom, the rush for capital has been helped lift their investment banking units. The five biggest firms racked up almost more than $19 billion from underwriting revenue in the first nine months of the year, including a 48% jump in equity capital markets and a 13% rise from debt underwriting.

Goldman has pushed to get in on the boom, including landing a spot as the only bank in a partnership that committed in August to financing $500 billion of AI chips deals for customers of Nvidia.

Goldman Erects Lobby Rockets As Morgan Stanley IPO Feud Heats Up.

SpaceX signage in the lobby of the Goldman Sachs headquarters in New York in June. Photographer: Kena Betancur/Bloomberg

In SpaceX's deal announced Monday, Elon Musk's company is buying chips from Nvidia, backed by a lease with Apollo Global Management Inc. Goldman worked as the structuring agent, while funds managed by its asset manager committed money to the deal. The deal, which is separate from the Nvidia partnership, came together after the bank received a call from SpaceX months ago, according to a separate person familiar with the matter, who also asked not to be named discussing non-public information.

In June, Goldman was the lead bookrunner of SpaceX's record-setting IPO, for which it was paid $100 million in fees after years of relationship building by senior bankers Dan Dees, Kim Posnett, David Ludwig and Susie Scher.

The bank also reaped hundreds of millions of dollars more from incentive fees tied to early investments it helped arrange for its wealthy clients, Bloomberg News reported earlier this month.

Goldman was also an adviser to Google parent Alphabet Inc. on its more than $80 billion package of equity offerings, one of the largest of all time. Its key bankers on that deal, Posnett and Yasmine Coupal, also drove the Meta deal announced Monday.

Last year, Goldman formed a capital solutions group, led by Pete Lyon and Mahesh Saireddy, to help the bank tap its various businesses - from its asset manager, to its investment bank and even Goldman's trading operations - as it constructs large financing packages for companies.

"We feel like we sit right in the center of this investment super cycle," Goldman President John Waldron said in May.