Wall Street’s AI party is an exclusive affair

Wells Fargo & Company

16/09/2026 13:00

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Stephen Gandel
NEW YORK, Sept 15 (Reuters Breakingviews) - Brian Moynihan knows how to spoil a party. Speaking at an investor conference this week, the Bank of America BAC.N chief executive predicted that investment banking fees will fall about 10% industrywide in the third quarter, with his firm faring even worse. It’s a surprisingly dour note as high-tech fervor seizes markets. Yet it makes sense: fewer and larger deals, a private equity slump and concentration in artificial intelligence are set to widen the gap between Wall Street’s top consiglieri and everyone else.
Investors have seemed confident of an impending boom in transactions. Shares of Goldman Sachs GS.N, home to leading deal advisers, have surged. Lenders with smaller investment banking franchises, like Wells Fargo WFC.N, have lagged. Moynihan's comments, though, suggest that the industry’s recovery is not unfolding as broadly as might be expected.
The biggest disappointment is private equity, which for much of the past two decades has reliably generated fees for banks large and small. In the second quarter, the volume of deals driven by buyout barons fell 37% from a year earlier, according to PitchBook. These transactions have traditionally been accessible to a wider range of banks because relationships often matter more than deep industry expertise. They also tend to rely heavily on financing, allowing lenders with large balance sheets to compete effectively.
Among the remainder of M&A and equity and debt offerings, a tilt towards fewer but larger transactions is driving higher activity by dollar value even as the total number of deals declines. The result is a more exclusive fee pool. JPMorgan JPM.N, Goldman Sachs and Morgan Stanley MS.N captured nearly a quarter of global investment banking fees for the third quarter through to September 15, according to LSEG data. That’s up from 19% for the full quarter last year.
That trend is unlikely to reverse soon. After steering SpaceX’s SPCX.O $75 billion initial public offering, Morgan Stanley and Goldman Sachs are in pole position to lead Anthropic’s listing, the Financial Times reported. Rising safety concerns and the specter of voluntary slowdowns or regulation might also restrict activity.
Morgan Stanley Co-President Dan Simkowitz struck a more optimistic tone at the same conference as Moynihan, saying his firm has plenty to work on. The deal party, in other words, might still be getting started. Getting behind the velvet rope is just becoming a little bit trickier.
     
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CONTEXT NEWS
Bank of America CEO Brian Moynihan, speaking at the Barclays Financial Services conference on September 14, said third-quarter investment-banking fees are likely to fall more than 10% from a year earlier. The company's shares closed nearly 5% lower on the day.

(Editing by Jonathan Guilford; Production by Maya Nandhini)
((For previous columns by the author, Reuters customers can click on GANDEL/ stephen.gandel@thomsonreuters.com))