MW Eager for an OpenAI or Anthropic IPO? Then Trump's Fed pick is good news.
By Christine Ji
Kevin Warsh supports President Trump's desire for lower interest rates, and that could be a catalyst for blockbuster artificial-intelligence IPOs
OpenAI is reportedly targeting a public offering in late 2026.
President Donald Trump's nomination of Kevin Warsh to be the next chair of the Federal Reserve unleashed chaotic market action on Friday - and it also may have poured more fuel on the artificial-intelligence trade.
The decision flashed a green light to Silicon Valley indicating favorable financial conditions for equity capital raises. That's especially relevant for OpenAI and Anthropic, which are reportedly preparing for high-profile public-market debuts later this year. Elon Musk's xAI is also reportedly in talks to merge with SpaceX or Tesla $(TSLA)$ ahead of a planned initial public offering later this year
Trump made Warsh his pick following a long campaign to replace current Fed Chair Jerome Powell with a leader willing to slash interest rates. Warsh has developed a reputation as an inflation hawk, or someone who prioritizes low inflation and price stability.
Warsh has not only positioned himself as an ally to Trump but also to AI development, writing in November that "AI will be a significant disinflationary force, increasing productivity and bolstering American competitiveness."
Read: OpenAI reportedly eyeing an IPO by year's end, ahead of Anthropic
Young AI startups looking to tap the public markets still won't have an easy path, as they will need to prepare for more detailed financial disclosures at a time when both companies are burning cash, Greg Martin, managing director at Rainmaker Securities, told MarketWatch.
"They'll have to manage their negative cash flow," Martin said. OpenAI in particular "needs to clarify their specific position in the market, and have a better plan to get to a profitable position sooner."
But a friendlier financial backdrop would likely make these companies more willing to test the public markets. Lower rates typically incentivize investors to shift money from cash and bonds into the stock market, with the hope of higher returns. As such, their management teams might anticipate more appetite for their shares. A lower discount rate also increases the present value of a company's future cash flow, allowing it to fetch a higher valuation.
IPOs would also give OpenAI and Anthropic the ability to turn what Martin sees as "global interest in AI companies" into a new source of funding. "These companies need access to as much capital as they can get," he said.
See more: As SpaceX prepares for its IPO, Elon Musk's empire could get even more intertwined
If confirmed, Warsh will succeed Powell in May - a development that Martin views as a powerful tailwind for both capital markets and a long-awaited IPO resurgence. With a solid macroeconomic backdrop, Martin is anticipating a "swell of interest in IPOs" in 2026.
Warsh has argued that an AI-driven productivity boom could naturally lower prices, creating natural deflationary elements that would support rate cuts and lower the cost of capital for investors.
Still, Warsh might not be a "guaranteed rate cutter," Martin told MarketWatch. While lower rates are beneficial for the IPO market, what's more important is market stability, and Martin believes Warsh will provide that. He noted that in 2025, uncertainty from Trump's tariffs dampened capital-markets activity.
Calvin Tse, head of U.S. strategy and economics at BNP Paribas, also expressed optimism about the implications of Warsh's nomination on market stability, writing in a Friday note that Warsh should be able to maintain his close relationship with the Trump administration while making policy choices independently.
"Trump explicitly wants the U.S. to lead in AI, and Warsh is aligned with that productive-capital agenda," Jim Thorne, chief market strategist at Wellington-Altus, told MarketWatch over email. "In that context, he is not a hawk - and the AI trade is on."
-Christine Ji
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(END) Dow Jones Newswires
January 31, 2026 07:30 ET (12:30 GMT)
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