Morgan Stanley and Goldman Sachs are joint and equal leads on Anthropic's IPO, with Morgan Stanley stabilizing the stock.
Pick pegs AI capex at $10tn to $15tn over the next decade, adding 50 to 70 basis points of global real GDP growth.
NIMBY opposition to data centers adds a completion-risk premium even as hyperscaler-backed public-private builds continue.
Ted Pick puts AI build-out at $10tn to $15tn
Morgan Stanley's Ted Pick thinks the AI build-out is a decade-long, $10tn to $15tn capital project rather than a bubble, and he is positioning the bank to finance it. The spending is justified by productivity gains he puts at 50 to 70 basis points of global GDP growth, and by compute demand that outruns supply. The risks are local, from NIMBY fights over data centers to sovereign borrowing that competes with corporate capital, and the Street will answer with more structured, privately funded deals.
Takeaways
AI capex of $10tn to $15tn is digestible. Pick expects $10tn to $15tn of AI capital expenditure over the next decade, deployed in 7 to 12 years. Spending near $1tn a year puts the industry in the second or third inning. Productivity should add 50 to 70 basis points of global GDP growth.
Enterprises cannot wait to secure compute. Demand is outstripping supply, so firms must pay up now to look like the enterprise they want to be in two or three years. Pick says they can be half a step behind but not two paces, or Chinese models get ahead of them.
Not every AI project will return. Pick compares the cycle to 1999 to 2001 and 2006 to 2008, when plenty of capital went to work without a return. He is still highly confident the aggregate $10tn to $15tn earns returns in efficiency over 15 to 30 years.
NIMBY fights will shape the build-out. Communities want the cash a data center brings but not the backlash of having it nearby. Pick expects nimbyism to enter the general economic discussion, and says projects backed by big hyperscalers are being done thoughtfully as public-private partnerships.
Crowding-out worry has some fairness. Pick concedes the point, noting sovereigns in older, demographically advanced countries must refinance debt and Western deficits are real. He calls the competition between growth capital and central banks refinancing debt the clearing of markets.
Morgan Stanley and Goldman share Anthropic lead. Pick says the two banks are joint and equal leads on Anthropic's IPO, with Goldman Sachs on the left of the prospectus and Morgan Stanley stabilizing the stock. They are economically equal in every respect, and he declines to say more.
How the AI deals get financed
Morgan Stanley's job is to be trusted advisor, deciding how much debt or equity a structure needs and how to bring a project to market despite location risk.
Projects that face local resistance carry real estate risk and a premium to completion, whether a local premium or a country premium.
Hyperscalers' extraordinary free cash flow can carry a higher debt stack, whether investment grade, subordinated, or with more equity at the bottom.
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Much of the AI capital structure can now be funded privately through securities that trade, a capability Morgan Stanley added through an acquisition, and Pick expects more tailored product for specific investor types.