Investment banks are reaping "strong fees" from a surge in AI-related deals, capital raising, and loans, according to bankers. This financial bonanza includes a $26.5 billion ADR offering for SK Hynix and SpaceX's record $86 billion initial public offering. Wall Street firms are generating lucrative fees as technology companies rush to fund AI infrastructure.
Capital's Feast
Goldman Sachs CEO David Solomon stated that "The build-out of AI infrastructure remains in its early stages, and we believe this multi-year investment cycle will continue to drive elevated levels of strategic activity, financing, and capital formation across markets." Solomon added that the industry "is in the middle of an AI capex super cycle" where every financing instrument is in demand. Goldman Sachs acted as the lead left underwriter on the SpaceX IPO. The firm is also set to play a significant role, alongside Morgan Stanley, in the upcoming listing of Anthropic. Rival OpenAI has also filed for a U.S. IPO, indicating further opportunities for capital extraction.
Citigroup, a joint global co-ordinator on the SK Hynix sale, earned over $70 million from that single deal. Citi CEO Jane Fraser noted that AI was "dominating a lot of the conversation" with accelerating spending on technology, data centers, energy, and defense. Bank of America recently extended a $520 million credit line to OpenAI, marking its first loan to the AI company. Bank of America has helped raise nearly $500 billion for AI-related companies since 2025. This accounts for 60% of such fundraising across investment-grade debt, leveraged finance, and equity capital markets, according to internal data.
Larger rival JPMorgan Chase has also engaged with AI-related companies on fundraising and is financing data centers. Meta Platforms is collaborating with Morgan Stanley and JPMorgan Chase on a roughly $13 billion financing package for a data center in El Paso, Texas. JPMorgan Chief Financial Officer Jeremy Barnum observed decent capital expenditure and loan demand from companies indirectly linked to AI. He remarked, "It's like the comments about data centers wind up creating a lot of demand for plumbers and electricians, so you wind up seeing it in sort of slightly non-obvious places."
The System's Instability
Despite the massive influx of capital, July has proven difficult for technology stocks, particularly microchip makers. Investors are grappling with high valuations and questioning the long-term viability of the AI capital expenditure boom. Stephen Biggar, director of financial services research at Argus Research, confirmed that "The AI-driven capex super cycle has benefited equity issuance, M&A activity and debt financing." Bank of America CEO Brian Moynihan acknowledged that "inflation and tighter monetary policy remain key risks," even as he praised the U.S. economy's durability. This durability, he claimed, is supported by a "strong consumer" and "ongoing AI-driven investments." The market's volatility underscores the speculative nature of this capital accumulation.
Labor's Place in the Boom
While financiers celebrate the "super cycle," the direct impact on the working class remains largely unaddressed. JPMorgan CFO Jeremy Barnum's comment about "plumbers and electricians" highlights that while some labor is required for infrastructure build-out, the narrative focuses on demand for services, not on improved wages, working conditions, or the distribution of the immense profits generated. The financial gains are concentrated at the top, flowing into the coffers of investment banks and their shareholders. The article offers no details on how these billions in capital formation translate into tangible benefits for the workers whose labor underpins the entire system.