President of NYSE Group and Chair of ICE Fixed Income & Data Services, Intercontinental Exchange Inc
Lynn Martin on AI, IPOs and the future of public markets
Axios' Courtenay Brown sits down with New York Stock Exchange Group President Lynn Martin to discuss how AI is reshaping ...
About Lynn Martin
Lynn Martin, President of the NYSE Group, discussed the role of public markets in funding AI and other technological revolutions, stating that "the public markets are the only markets to generate the type of capital for the medium to long term on a consistent basis that is required for every revolution." She added that a healthy public market requires a healthy private market, as private incubation stages feed into public offerings. Martin also commented on the Trump administration's investment accounts for young people, saying they are "great from two perspectives," promoting financial literacy and creating a generation with "a stake in America." Martin questioned rule changes made by the Nasdaq to attract a listing from SpaceX, saying that "market integrity is not something that is a competitive dynamic" and that some of the rules are "questionable." She emphasized that protecting investors, particularly retail investors, is the NYSE's priority. Martin noted that the NYSE has seen a strong year for IPOs across multiple sectors, including industrials, energy, and consumer names, and that the exchange has "no intention of leaving New York City."
Transcript (42 segments)
L
Lynn Martin0:00
Thank you.
I
Interviewer0:02
Welcome back to Washington DC.
L
Lynn Martin0:04
Thank you. It feels like my home away from home at the moment.
I
Interviewer0:07
We're going to talk about that. So, the last time I think the public saw you here was earlier this month in the Oval Office. Something very cool. President Trump ringing the opening bell from the Oval Office. And that was a first. Yep. Never happened before.
L
Lynn Martin0:23
Never happened.
I
Interviewer0:24
So, here's what we want to ask you. We want a little bit of intrigue. What's something that happened in the room that morning that the cameras did not see?
L
Lynn Martin0:35
That's tough because the cameras got a whole lot of the kids and the kids were
Their faces were just struck by the moment, which I mean you saw a lot of the really cute things where the one kid fell asleep and the other was supporting that child. But I don't think the cameras caught when the president was talking to the kids about 'you now own a piece of Boeing, you now own a piece of McDonald's.' And the look on their faces were like, wow. And they were kind of grasping what ownership of companies, ownership of America actually meant, and they could really relate that to their day-to-day.
I
Interviewer1:28
So, the bell ringing ceremony was the official launch of the Trump accounts. I need you to help me with something. We were talking backstage and I have a very cynical view of what's going on, but let me lay it out.
So, there's a lot of momentum right now around getting Americans to invest. The administration is launching Trump accounts, investment accounts for newborns, right? Retail investors have a huge force in financial markets. Companies like SpaceX are trying to find ways to include retail investors in their IPO. So, what is going on here? So my cynical view is that this is just a feature of the bull market. When stocks are going up, it's so good to get everyone in. But something tells me you have a less cynical view of what's going on.
L
Lynn Martin2:14
I do have a less cynical view. So if we take a few steps back, retail investing really got their start in force during the pandemic when everyone was in their basement figuring out what to do. And you saw apps like Robin Hood really gain hold. Retail investing's been around forever. Yeah.
By the way, you know, it's just taking more direct ownership
is what you started to see during the pandemic.
So you started to see last year allocations during IPOs to the retail community because that was a big criticism that the retail community have. And
We want a piece of this too.
We want a piece of the IPO. We don't just want to be able to participate in the market when the stock has been opened for trading and the aftermarkets after that. So we saw a few deals actually have pretty outsized retail allocations more towards the crypto side of the business. I think bullish was one of the first ones that went out last year where they think they went out with about 20% retail allocation.
And that actually made sense for that one because it's a cryptonative platform. It's speaking to that real retail enduser.
I
Interviewer4:25
Yeah.
L
Lynn Martin4:26
In a different way,
I think. So, I think for the long term, the retail investing public is here to stay. And I think that is a good thing because of the technology. You're going to be able to have an outcome-based input as opposed to just a traditional buy or sell of a security. You can go into a platform and talk about I want my assets allocated in this way across fixed income, across equities, across this type of sector, that type of sector.
I
Interviewer5:01
Okay.
L
Lynn Martin5:01
The Trump accounts with the latest generation, the youngest generation, I think are great from two perspectives. Number one, it's really promoting financial literacy. So, as a parent, you have a conversation with real tangible items at the dinner table with your kids as they're growing up. So, we're actually going to be able to raise a generation of financially literate people in this country, which I think is wonderful. And then secondly, I think it's a great unifier as that generation will have a stake in America, if you will, because they will be invested in the S&P ETFs, for example.
I
Interviewer5:50
Okay. So, ownership economy, you think, here to stay.
Something interesting about you. You started your career as a programmer at IBM, correct?
You like computers. You're kind of a nerd. Is there anything about the excitement around AI that reminds you of earlier technological booms? And then what do you see as genuinely unique to this moment? Besides the fact that it's moving faster and it's bigger than ever.
L
Lynn Martin6:20
Yeah, so the concept of AI has been around for quite some time. It kind of takes me back to some of the things I studied in my compsai undergrad degree around neural networks and things of that nature. So, it's been around for a while. It's just, to your point, been perfected and the speed that it is moving is way faster than anything we've seen before. It does remind me a bit of the internet when the internet I'm old enough to remember that moment when the internet became, you know, part of our common language. And that's the only parallel I will really
I
Interviewer7:03
And that's a fraught parallel. I mean the internet is great but there was a bust.
L
Lynn Martin7:07
Yeah. And that's why I say that's the only parallel I will draw because AI is so much a part of our vernacular and changing the way we do things in the way that the internet is. The thing about the AI economy is it's broadening out and it's broadening out to sectors that I think are going to continue to have tailwinds from an investment perspective for quite some time. You look at the energy sector, you look at the infrastructure sector, those are sectors that will in my mind have outsized returns for a longer period of time. Not just driven from the AI economy, but driven by the infrastructure needs of our country in general. I feel like we need to talk about Texas just really quickly because there is a big moment happening with what you know everyone, even you know Treasury Secretary Scott Besson is calling Yall Street. You launched last year I believe NY Texas. Like when a company chooses NY Texas, do you think it's inevitable that people will see that as some sort of political statement on the part of the company, whether the company attends it or not?
Which in my mind is not political. It is a CEO making a decision to do something in the best interest of his or her company that really enables them to further grow their business. To your point, we launched last year. We have about 120 listed companies already. Texas is actually the biggest state by market cap for the New York Stock Exchange. About $4 trillion worth of market cap is down there. But I think that further underscores my point that Governor Abbott has made it easy to do business there.
Worth of market cap is down there.
I
Interviewer9:18
President Trump kind of hates this though and he called it like a big test for New York City Mayor Adams. He said that this equities trading outpost in Texas was a quote unbelievably bad thing. How would you respond to that? And have you met with Mayor Adams yet?
L
Lynn Martin9:38
So I think when President Trump has said it's an unbelievably bad thing, I think he's referring to the fact that Governor Abbott has done a lot of very good things from a business perspective
That's causing that drive away from New York.
Yeah, I don't know that we've really seen a drive away from New York. There have been other states
Which have lost some companies and Texas has been the beneficiaries, but I don't know that you've necessarily seen it from New York.
We've been at New York for 233 years or 2434 years. You say, as you rightly say, we're almost as old as this country. And
I
Interviewer10:20
Happy birthday.
L
Lynn Martin10:20
Thank you. And we have no intention of leaving New York City.
I
Interviewer10:25
And then quickly, have you met with Mayor Adams yet? I have met Mayor Adams in a variety of settings.
Okay. Final question because we have to go. Does AI require a scale of capital that only public markets can provide? I think that the public markets are the only markets to generate the type of capital for the medium to long term on a consistent basis that is required for every revolution. But I think importantly a healthy public market needs a healthy private market. So all of the incubation stages, even the large funding rounds that a lot of these AI companies have done in the private markets are incredibly important and feed into the public markets.
So more AI IPOs to come than you think.
Fingers crossed. All right, Lynn Martin, everyone. Thank you so much.