Goldman investment banking co-head Kim Posnett on the year ahead, from an IPO ‘mega-cycle’ to another big year for M&A to AI’s ‘horizontal disruption’

AI Industrialization and Breakthroughs - 2025 marked a significant transition from AI experimentation to industrialization, with major advancements in models, agents, infrastructure, and governance [1] - The launch of DeepSeek's DeepSeek-R1 reasoning model demonstrated that world-class reasoning could be achieved with open-source models, challenging closed-source models [1] - The $500 billion public-private joint venture, Stargate, initiated a new era of AI infrastructure, termed the "gigawatt era" [1] - Major model launches by OpenAI, Google, and Anthropic at the end of 2025 showcased enhanced deep thinking, reasoning, and multimodality capabilities [1] M&A and Capital Markets Activity - The global business community is experiencing strong catalysts for M&A and capital markets activity, driven by AI as a growth catalyst [2] - CEO and board confidence is high, with a focus on strategic and financing activities aimed at scale, growth, and innovation as AI becomes an industrial driver [2] - M&A activity surged in 2025, with a total volume of $5.1 trillion, reflecting a 44% year-over-year increase [11] IPO Market Outlook - An "IPO mega-cycle" is anticipated, characterized by unprecedented deal volumes and sizes, with institutionally mature companies going public [8] - The current IPO cycle is expected to feature larger deals compared to previous waves, with companies having raised significant private capital before going public [8][9] - The reopening of the IPO window presents opportunities for investors to engage with transformative and rapidly growing companies [10] Strategic Dealmaking Trends - The M&A landscape is shifting towards bold and strategic transactions, with companies seeking to acquire AI capabilities and digital infrastructure [12] - Boards are now making high-stakes decisions in a rapidly evolving technological environment, where traditional benchmarks may not apply [13] - Financial sponsors are returning to the M&A stage, with a significant increase in M&A volumes and a focus on executing take-privates and strategic carveouts [14][15]