JPMorgan Chase is relaxing its stock-backed lending policies for employees and early investors of newly listed companies, as the U.S. bank seeks to win clients tied to emerging tech giants.
The bank's standard policy typically requires a 135-day waiting period after a company's initial public offering before accepting its shares as loan collateral. However, according to sources familiar with the matter, ahead of SpaceX's massive IPO in June, JPMorgan informed its private bankers that it would accept shares of Elon Musk's rocket and artificial intelligence company as collateral for stock loans much earlier than usual.
JPMorgan's private bankers anticipate the firm may take a similar approach when Anthropic, the developer of the Claude chatbot, goes public, though no final decision has been made. The bank earned $75 million in revenue from its participation in the SpaceX IPO.
This move highlights how asset managers are aggressively competing for business generated by the enormous wealth created by the AI boom.
Under U.S. securities regulations, broker-dealers involved in an IPO can typically begin stock-backed lending activities after just a 30-day wait, meaning JPMorgan's previous waiting period was already longer than the regulatory standard.
Sources say other banks, including Goldman Sachs, typically do not exceed a 30-day waiting period for such lending activities. Goldman Sachs declined to comment.
JPMorgan said its policy has not changed: "Our business standards exceed regulatory requirements, and we always evaluate each transaction and each client on a case-by-case basis, taking into account factors such as market liquidity."
Anthropic declined to comment, and SpaceX did not respond to requests for comment.
Top engineers at AI labs can earn millions of dollars annually, with some making tens of millions, and a portion of their compensation comes in the form of company stock.
In the second quarter, Morgan Stanley's wealth management division attracted more than $74 billion in new net assets from IPO projects, including SpaceX, by managing employee equity incentive plans for corporations. The bank stated the performance was "not a one-time benefit," noting a large pipeline of major listings ahead.
Some Anthropic employees hold assets valued at tens of millions of dollars. Anthropic was valued at $18 billion in 2024 and now has a latest valuation of $965 billion. In June, the company said it had confidentially filed for an IPO, and investors expect the AI startup to go public in October at a valuation of $2 trillion or higher.
For high-net-worth individuals, stock-backed borrowing is often preferred over selling shares directly to minimize tax impact.
When banks assess collateral quality, the core consideration is how easily the asset can be liquidated; shares in private companies are far less tradable than publicly traded stocks. Even after a company goes public, lock-up agreements can restrict share sales. Stock volatility also tends to be higher after an IPO.
Nevertheless, the wave of high-valuation tech companies going public represents a significant opportunity for Wall Street institutions hoping to serve this new class of wealthy individuals.
Other wealth management firms are also competing for employee clients ahead of major AI company IPOs: cutting fees, adding staff in Silicon Valley, and striving to secure these employee clients before OpenAI and Anthropic listings create a new generation of millionaires.