Investors are becoming increasingly selective regarding IPOs in the artificial intelligence sector, according to Aloke Gupte, co-head of global equity capital markets at Citi. The primary concern is the rising cost of building AI infrastructure and the uncertainty surrounding the long-term financial sustainability of companies in this field.
The pressure is particularly high for neocloud providers that specialize in renting out AI and cloud computing capacity. CoreWeave, a prominent player in this space, saw its share price drop by more than 3% on October 20, 2026, and lost nearly 25% of its value during that week as borrowing costs increased.
Several companies have postponed their public offerings due to current market conditions. SB Energy has delayed its plans, while Anthropic has rescheduled its listing for mid-November. OpenAI has pushed its potential offering into 2027.
The technology sector is showing a significant reliance on debt financing, with investment-grade tech debt issuance currently running at more than double the pace of the previous year. Citi analysts suggest that larger providers with substantial existing capacity are better equipped to manage these expensive capital conditions.
