Inside the Biggest M&A Deals & AI News You Need To Know (Medline, Amazon, Nvidia, OpenAI)

Hello and welcome back to the Market Maker podcast and welcome back to the M&A Show, which is where we do a bit of an overview of some of the major deals of the last week and talk about some other interesting headlines related to the field of corporate finance. So I'm going to have to apologize to our researcher, Saab, who always does such a thorough job, but I'm going to completely skip over his deals of the week just because A, there's not too much sexy there, but because what is sexy is one of the biggest lined up IPOs of the year coming just in the nick of time. So we're going to talk about that for a little bit. Really interesting developments then of what we've seen in the league tables. We might well have, for any of our longtime listeners, special guest, the one and only Stephen Barnett might be coming back for an outlook on the M&A scene for 2026. So that is coming, folks.

Let's get the red carpet out.

Get the red carpet out for Stephen. But we'll have a little touch here because this latest IPO we're going to talk about, Medline, is of such an order of magnitude that it is going to shift around the league tables a little bit in terms of the sectors. That have been driving the ECM part of the investment banking scene. And then we're going to talk about AI, but in the context of everyone's been talking about how Google has kind of thrown the cat amongst the pigeons in a sense of Gemini and what's come out, and that's put the red alert on as a status at OpenAI, but also the chips, what we were talking about with Google recently and how that's impacted NVIDIA. Last week, Amazon have come forward with their latest one. So what's Amazon got to offer and should Nvidia be worried? So yeah, perhaps we can start with this biggest IPO deal of the year, Piers.

Yeah. Medline. Here we come. This could be an absolute monster where they are looking to raise $5 billion. I mean, look, just to get the timings right here, it hasn't happened yet, but it's probably looking on for early part of next year, probably hopefully January maybe. But this is an interesting case for a couple of reasons. Firstly, they've been on the docket for an IPO for a while. They were one of the big kind of names on the list that decided to delay their IPO because of Trump's tariff policy. And look, partly that's because of the line of business that they're in. So, you know, who are Medline? They're actually a privately, well, they were a family-run business run outta Chicago. We'll talk about the PE deal they did in 2021 in a minute, but family business outta Chicago. They distribute medical supplies to like hospitals and clinics. And so we're talking surgical equipment, you know, gloves, gowns, you know, all the rest of it, right? And they supply that globally. So actually they've got 43,000 employees. They operate over 100 countries, sales around about $23 billion, right? So from a tariff perspective, obviously you've got a fully global business here and it's about obviously shipping equipment, you know, all around the planet. And if tariffs were going to come in and really put the glue in the kind of movement of goods globally, then that was going to be a really big issue for them. So they kind of just stepped back and said, all right, their PE owners, I should say, stepped back and said, okay, we're not going to IPO now. We're going to wait. Originally they'd wanted to go early 2025, but they kind of changed their mind. So, you know, this is the business. You know, why do they want to IPO? Because, well, it's a private equity cycle, right? The PE boys came in. In fact, they're the biggest privately owned US distributor of medical products. And so they did a PE deal back in 2021 and it was acquired for $34 billion. Okay. So it was a leveraged buyout and you had the big guns like Blackstone, Carlyle, Hellman Friedman. I think you had the sovereign wealth funds getting involved from the Middle East as well, right? Re— obviously $34 billion. $1 billion deal. That's a huge check size. So you had a consortium of PE firms coming together to kind of do that. But of course, private equity companies, their strategy is to buy, then increase the value of that asset, then sell. Okay. It's very much on a cycle. The PE world often work on this kind of 3 to 5 year idea where it takes them 3 to 5 years to A, pay down some of the debt. So remember, normally this is a leveraged buyout. So the PE firms will use debt as well as a little bit of cash to buy the company. They'll then run the company and in the meantime pay down that debt so that then when they sell it at the end of the cycle, you know, they've got more of an equity portion and it kind of leverages their returns. Okay. Also at the same time, It's not just about buying the company, paying down the debt, and then selling it. They can, they improve the business, can they grow the business, or can they improve margins and make it more profitable? And so actually this has been executed really well. So we've seen the profitability and the margins of Medline improving through this kind of PE cycle. So it kind of made sense that it was ready to go. The problem that the PE industry have had though, is that the IPO market has been closed, right? Deals have just not been coming because investor appetite just hasn't been there.

Why?

Interest rates. First of all, interest rates have been really high. And look, if you want to do sell big assets like this, who are you selling to? Well, investors who often need to leverage up and to take on some debt to finance that purchase. But if debt's really expensive, 'cause interest rates are high, it just puts a whole, puts on, puts the ice all over that kind of setup, right? So private equity firms have been incredibly frustrated in that they haven't been able to exit through the IPO channel a lot of these investments, which is bad. It's a bad look for the investors from the private equity firms' investors. They want payouts, they want returns, they want liquidation events, right? And these PE firms haven't been able to do it. So this would be an awesome deal to get over the line. A, because of its size, it's an absolute monster. But B, it would be a great kind of signal for these, particularly the US PE space, to see a really big liquidation event and see these PE firms being able to return capital back to their investors. So yeah, it's certainly a headline grabbing moment here.

And then I'm assuming that because of the size of this deal, hence the reason why there's so many investment banks on the books. So lead book runners here I've got listed are Goldman Sachs, Morgan Stanley, Bank of America, JP Morgan, So all of the big boys. I mean, that's, I mean, we'll look in a second, but I'm assuming that's like 4 of the top 5 right now. Yeah.

You're missing Citi. It's 4th in the top 5.

Yeah. And we can dive into this actually. Maybe this is a good segue to talk about, you know, the divisional breakdown of when we talk about investment banking. Obviously the mind tends to gravitate towards M&A fees, but ECM, DCM, and who are the leading ones there? And when these bigger firms naturally have much bigger franchises, when they have the ability to take on that type of business for sure. So the other thing is it's going to be on the NASDAQ. So in terms of the exchange, so the NASDAQ Global Select Market under the ticker MDLN. So yeah, any other points on that before we move on?

Well, I mean, it probably may be worth just reminding people of the process here and why it's suddenly come into the news. 'Cause so the process is that first you've got to file a prospectus with the regulators and that's what's just happened, right? And so it's like, ah, wow, okay, that's your signal that, right, these PE firms and Medline, okay, they're back at the table here looking to get a kind of process done. You file the prospectus with the regulators, they check it, they verify that the information in it is valid and true. Then it's like go time. Well, what does that mean? Well, it means these banks then run, well, they kind of run a roadshow, right? Where they basically take Medline's kind of management team and they take them on a roadshow and sit them in front of, you know, big investor communities. And it's about telling the story, you know, why is this an investable opportunity? You know, talking about your hockey stick charts with amazing future growth and all the rest of it, getting them excited. Okay. Then hopefully from that process, you'll also get what we call some cornerstone investors, which will be a, you know, hopefully like a small handful of big, you know, notable investors that are saying, yes, we're in. We want to be a kind of cornerstone investor. This is great for a process because if you've got a big name on the ticket, then obviously that's reassuring for all the other investors in the community and perhaps then kind of greases the wheels for other investors to get on board, right? So you might want to try and find some cornerstone investors, but then you do a book building process after the roadshow, which is like, hey, right, you lot, you've heard the story. Right. Who's interested? You know, show us your interest. And then from, so you basically get these kind of bids coming in, which is then enables, and that's why you need these multiple banks on the ticket. If you are trying to sell something that's going to be worth, we think roughly $50 billion. So that'll be a great flip. They bought it for $32 billion in 2021. They're looking to flip it for $50 here. And obviously the amount of debt in that business will've reduced as well. So this is going to be a great return for the PE firms on such a massive scale, right? 50 billion's a lot. So you need multiple book runners out there. So you need the big guns tapping into their respective really large networks. And so you do the book building, which gives you a gauge on demand, because ultimately you've got to price this thing, right? Come IPO day, you are going to issue shares and sell them. Well, what's the share price? Well, these banks calculate the share price from understanding the demand that they've been able to gauge during the book building process. They'll often give guidance, right? So when they're out on the roadshow, they'll guide, right, we're looking at a range and they'll give a share price range. And that's something that the investors can kind of have a think about. And then when they put their bids forward, they kind of place their bid somewhere in the range. And if you're super positive on this opportunity and you really want it, you're going to bid top end. If you're lukewarm but interested, maybe you'll go bottom end, right? And then you build this book of demand. Then they price it and hopefully they price it correctly because then it's like, right, IPO day. Let's now sell these shares to the investment community that have shown interest at the price we've decided. And great, the IPO's done. That's where the PE firms exit. They sell their shares in the business. To then the other new investors coming in. And then it becomes publicly traded. And so that's, they've chosen the NASDAQ and then anybody in the world will be able to trade these shares in the secondary market on the NASDAQ thereafter.

Yeah, it seems like, seems like this is a significant signal then on many fronts for deals in 2026 because at around $5 billion, this IPO would dwarf the current US leader Venture Global's $1.75 billion listing in January. Remember at the beginning of the year we were all like, this is the year for M&A, and then the complete opposite kind of happened. But as you were just rightly saying, I mean, I was just looking back on a post that I did. This was back in 4 months ago, and it was the FT ran an article talking about private equity firms flipping assets in record numbers to themselves.

Yeah.

In using continuation funds to cash out for investors. But is it just, is this a PE bubble and we recycling this debt as you were describing? But as you said, they're going to do very well out of this.

Yeah.

And in combination with the general macro climate, which is indicating at least at this point that rates in the US are going to come down. Yeah. You're going to have a Fed shift that's probably going to be more aligned and more favorable for those more dovish conditions as well. So what, looking quite good again, or we were hypothetically thinking this time last year that Trump's going to come in and create that environment, whereas this year that's now a known thing and a lot of those uncertainties or indeed risks over Trump have somewhat dissipated, particularly the big trade debacle. So is this now actually a much more known fertile setup for 2026 than it was actually looking back retrospect for 2025?

I mean, yes. Yeah. Without wishing to make the same mistake twice, Yes, it looks good for 2026, but the main thing is interest rates for these deals. So as long as the Fed are dovish in 2026, and who knows, does Hassett get the gig and all the rest of it, then do rates come down, then you're talking. Because I think at the moment, like half of the story about the IPO deal, sorry, the IPO market being a great winner from the Trump presidency, you know, half of it was about the regulatory side, like removing red tape. And Trump hasn't really got onto that part of his agenda yet. He's been so— his docket's been full with his tariff game, right? So I think in 2026 we'll see a little bit more of a focus on that from the Trump administration. If you can couple that with a rate-cutting cycle continuing, that's a pretty interesting kind of kind of cocktail to feed through to what is a huge pen— there's a massive queue of companies want, or PE firms particularly wanting to exit investments right there. They are queuing up. So it's all there, it's just ready to come. And maybe the cork is going to get pulled out of that thing and we might get a really interesting year of activity on the IPO market in 2026.

So maybe then to finish here, we know this is going to be, if it goes ahead, the biggest IPO. So where does that put it in terms of the sectors and then the rankings for these book runners?

Yeah, well, on from a sort of, well, the top 10 IPOs so far this year, let's start there. I'm actually just looking down the list. The first US entry on the list This is like a crazy unprecedented, it's actually 5th. So there are 4 bigger IPOs than any, I mean, the US is always top of this league table, always. So they're coming in 5th and that was Venture Global. And the ones above that are coming out of APAC, like all of them, right? So for the US, this will put them back on the top. This will, this, they will be the biggest deal, but it's not going to come in 2025. So it's a bit academic that, but yeah, in terms of sectors, as usual, the technology sector is the largest player, right? As in the volume of IPO deals, technology is leading the pack, but healthcare, which is currently in fourth. So If you think about the sectors in 2025, so far healthcare are, sorry, technology's number 1, industrials is number 2, financials 3, healthcare 4, materials 5. Okay. In the order, this is deal volume, IPO deal volume by sector in 2025. If they land this deal, then that healthcare sector one, I think that'll push them up one notch to third. I think that'll get them up, up above. The financials. But yeah, still technology is out at like $25 billion, whereas industrials is at about $19 billion, financials at $16 billion, healthcare currently sat at around about $12.5 billion. So yeah, they're definitely not going to get out to the technology. They're not going to hit top spot, but healthcare generally, as I said, in the episode last week, it's kind of, it's been a really bright spot of the marketplace in the last one month when you've had a little bit of a tech, big tech rollover with Nvidia down, whatever, 14% in the last one month. The healthcare stocks have really been ramping and a lot of this is due to the, it's not just IPO, it's all the M&A activity that's going on in that sector. And now this monster IPO and it's like, wow, okay, this sector's looking really hot and this is feeding into some share price appreciation. And if they get this Medline deal away, if, and it's successful, and if there's large demand and if it goes for top end of the price range, if, if, if, then it could really be a great statement and a great measure of the market appetite right at the start of 2026, which could really set the ball rolling for the 12-month period ahead. Yeah.

And when you talk about that pent-up demand, I was just looking at the stats here. 'Cause you said APAC's like the outright kind of runaway story here, but the US suffering, as you said earlier, by the shutdown, 'cause that paused new listings.

Yeah. Right.

And in the third quarter alone, there were 64 IPOs in the US raised $15.4 $15.3 billion. So the shutdown, when it did happen a few weeks ago, happened right at possibly the worst time if you were doing IPOs. But meaning though that they were running hot. We've had a gap, rates are now probably heading lower.

Yeah.

So probably going to come back pretty quickly if Medline gets away, as you said, really well. Cool. All right, well, look, let's head on and talk about this Amazon. It all, yeah, it's funny. It's like, as we will go on to describe, Amazon have been working on this stuff for a long time. However, it's funny that the news breaks just when they feel like they gotta come to market and start talking this stuff up in the context of we've had, you know, this is the third element or the third leg, so to speak. It's been NVIDIA. We were talking Google last week. Now we're talking Amazon. So what have Amazon got to bring to the table?

Amazon have got Trainium 3. That's what they've got. They've just slapped that onto the table, which is their latest in-house, basically AI accelerator chip. You know, it's a comp— it's direct competition for NVIDIA's GPUs. And you'll remember that Google, like it's so interesting with Google and actually Google, I mentioned the tech sector have rolled over a bit. Nvidia down 14%. Google's up 13% in the last one month because of the drop of Gemini. I forget the versions now. Is it Gemini 3? And it being, wow, hang on, this thing's amazing. Hang on, isn't this, this is better than ChatGPT. And Really key point, it was trained on Google's own TPUs. So they trained it on their own chips. So now all of a sudden Google's like, well, hang on, I'm a ChatGPT competitor and I'm an NVIDIA competitor at the same time, right? Now Amazon are like, okay, well, okay, I'll see your, I kind of see your TPUs. And I'll give you my Trainium 3, right? Which is their equivalent, right? So look, this is just, we knew it was always going to happen that the big guns turn up at the party and Nvidia have been enjoying, I think they've got 90% market share, right? So, and they've been, and with that have had the luxury of pricing power. And so their revenues have just been nothing short of disgusting in terms of revenue growth, right? But there's competition. So Amazon are saying, hey, we've got our Trainium 3. Note the, sorry, the number 3 there. So to your point, this isn't just something they've quickly rushed out. You know, they've been working on this chip for a while and now this is the third generation. And look, they've trained some of their kind of AI capability on their chips. And that's the proof point, right? Like Google have, you know, this just isn't a random new sideline that we've suddenly spun up to compete with NVIDIA. We've been working on this internally for a long time and it works 'cause we've trained our own stuff using these chips. So it's a great kind of sort of validator right out of the gate And obviously they won't have a problem with distribution and they won't have a problem with ramping up manufacturing, you know, these big boys. So, so yeah, this is, this is Amazon coming to the chip table and yeah, it looks pretty interesting.

Well, yeah, maybe I could give you some details on the chip in terms of context and then we can talk about the market fit. Yep. So, compared to the previous generations of these chips, because like you said, this is Trainium 3 servers and they're about 4 times faster and roughly 4 times more energy efficient, importantly, with early customers testing, uh, indicating cost reductions of up to 50% versus traditional GPU-based setups. And obviously for Amazon, you know, what's critical So that success of that business is their cloud and subsequently cloud AI from rivals that lean heavily on NVIDIA and the attempts strategically to reposition AWS as that market leader. Not just about, right, we're a business like AmplifyMe, right? We're gonna rent some Amazon servers. No, this is the underlying AI hardware stack as well as the cloud, the entire ecosystem. Which we'll go on to talk about, has many benefits from a user perspective.

Yep. I mean, look, at the end of the day, like if you're a customer wanting to buy these chips, well, at the moment you can't because Nvidia are basically, all of Nvidia's supply is getting bought by the big guns who are bullying themselves to the front of the queue, right? So you can't get hold of this stuff. If you can, It's ridiculously expensive. So if you get another player coming to the market at half price, like even if it's not quite as good, I mean, it's better than a double the price chip that you can't buy anyway. So, so there's two points there though, because there's two sides to that. Number one, well, isn't this really bad for Nvidia then? They're going to lose market share. Well, fine. Nvidia stock is down 14%, but it's not like it's collapsed. The point is here, the market's so big. Demand is so far outstripping supply. There's probably room at this table for a few big guns. Yes, Nvidia have enjoyed the whole table to themselves for the last couple of years, but there's plenty of space for others to come in and take up some of that demand, right? So that's one point to make. Don't rush out the door and sell all your Nvidia stock immediately because that's it, the game's up. So that's one point to make. But yeah, I think I do like the energy side of it. 4 times more energy efficient is a really important point. And as all of these guys go through their generations, then they're going to have to bring in some major energy kind of efficiencies, if you like.

Yeah. And I think there's like you were just kind of alluding to, I think there's this different on the enterprise side, I think there's just different use cases. So there's your regular company that's moving things to the cloud, and then there's developers who need like the power to, you know, on the, on the layers to drive their development projects. So if you are an enterprise and you're thinking about, you know, you're cost conscious, so cost per unit of useful compute, rather than thinking about benchmark performance, Right. This is where Trainium 3 aims to make large-scale AI training, agentic AI, all these video generation materially cheaper to run. Because one of the things on Google is it's got that, what is it, Nano Banana, where you can generate these videos, content, things like that. And actually, there's different, I think the use cases for the, for individuals as well is changing, even for my own habits. Whereas ChatGPT 5.1 is quite quick, whereas Gemini is quite slow, but the output qualities are quite different. And actually my behavior has changed where I'm not actually now looking for speed, I want quality. And so you're willing to sacrifice some speed and things like that, which is quite interesting. But yeah, then, and ultimately this whole kind of, I guess the terminology from a technical perspective is this vertically integrated hardware. Plus the sweetener, the managed infrastructure part, which is then where it all comes together for Amazon, why it's such a, a beast, because it reduces those supply bottlenecks. It gives Amazon more control over pricing, capacity allocation than if it was to rely purely on an NVIDIA solution.

Yeah. And the cloud compute race, there's 3 players basically. It's Amazon AWS, it's Azure from Microsoft, and then it's Google Cloud, right? Who come in very much third. But actually Microsoft and Google have been really benefiting more than AWS over this sort of 2-year period. And this is kind of AWS kind of finally strategically kind of positioning themselves to, as you said, from that vertical stack to kind of start to benefit on the cloud side. So it may be that 2026 is going to see Amazon return to the, you know, superfast cloud growth trajectory that we've been seeing from Microsoft and Google and that we used to see from Amazon in the past. They've just kind of plateaued a little bit, but maybe now this is the time that AWS revenue growth will start to accelerate.

One interesting point I saw in our notes was that talking about NVIDIA and Amazon, obviously at the moment is a very large significant customer of NVIDIA. We talked about NVIDIA's concentration risk. Where they've, what was it, 4 or 5 clients that they've got, which carries the bulk of their revenue.

I think 5 clients is 60% of their revenue, I think was the last stat.

So here, more than 10% of Amazon's capital expenditures go directly to NVIDIA's products.

Yeah.

And on the vice versa, Amazon accounts for roughly 7.5% of NVIDIA's revenue. So ramping up its own chips. Chipping away at that relationship where NVIDIA is already exposed to some degree. But I know that it's not quite as straightforward as that. It's not about displacement, as you said, there's much demand to go around to feed many mouths here. And so one of the things that I think looking ahead was talking about Amazon already saying that they're working on Trainium 4. I mean, of course they are. Like we know with all these tech firms, there are many the development's happening and the release cycle's very different. And their next generation AI accelerator is designed to be compatible with NVIDIA's NVLink Fusion networking tech, which connects chips with AI server racks at very high bandwidth. So it is, it's a strategy here for a lot of these companies, maybe even NVIDIA in itself, is that it's going to give some ground here. We talked about that kind of somewhat incestuous investment circular narrative, but in the end, there is better to be together and working in that way than try and compete against each other.

I think so. That's right. And so that's why this isn't necessarily a mega bear case for Nvidia. Yeah, there's going to, you know, these big, big tech, they're all going to be at the table. I mean, there isn't going to be one winner for AI. It's just not.

It's like we were saying, like, I think, you know, AWS, I mean, maybe it positions itself as it's a hybrid solution and you could have access to, a business could have access to Trainium or NVIDIA GPUs, as I said, depending on the necessity of the demand you require from an output. So you have the same high-speed fabric, let customers mix and match chips. And instead of a, well, they can access a single architecture and then start to then pick off the menu and choosing a single vendor within that mix, within your ecosystem. It just makes very good sense.

Depending on what you're, what's most important to you as an individual customer and customers are different. So they'll want. They'll have different priorities.

Cool. All right. Well, look, one of the things here to wrap up then, conversation was that things aren't looking so rosy for our dear fellow Sam Altman at OpenAI because he's had an absolute breakout year, but he's maybe getting a little bit nervous around the, you know, cutting the turkey this Thanksgiving because just while everyone was kicking back, enjoying a feast, he was declaring code red, which sounds pretty dramatic because I think in my head I hear code red. I don't know. I think of a blend of Arnold Schwarzenegger and also submarines in like the Russian sort of, this is a sort of where my, showing my age probably slightly. But they have a traffic light system, right? That's how they, OpenAI, prioritize the projects in which their multiple teams are working on. So, you know, you have yellow, orange, red signaling urgency across their teams. So yeah, what, what, anything to add on what has actually happened here at OpenAI?

Well, in short, they've got competition. It's like NVIDIA, but now not, not in the chip game, but actually in the chat sort of space, right? The AI agent space. And so Again, ChatGPT, I mean, they kicked off this whole revolution when they dropped their kind of product to the consumer market and it just went, it's the fastest growing product in history, right? But big tech are hunting them down and look, you can't, in the end, can you compete? I don't know. But Gemini, for example, over at Google, They are just cut— not only is their Gemini 3 now arguably better than ChatGPT-5, user numbers are kind of really catching up. So actually, if you look at active monthly users on Gemini, it's gone from 450 million users earlier in the year to now 600— oh, sorry, in July it was 450 million users. In October, it's 650. They are coming. And if you look in your rearview mirror and you can see Google gaining ground, that, I mean, code red. I mean, isn't there a code that's even more urgent than red? 'Cause I'd put that one on. So yeah, I mean, look, they need to just double down here. They're feeling a lot of pressure. But yeah, and the other one is Anthropic. 'Cause look, Gemini's thought, why is this now the best? One to use if you're an individual consumer, maybe. And then on the sort of enterprise side, you've got Anthropic and their one is called Claude and their model is kind of gaining a lot of traction amongst the business, you know, customer community. And that's eroding OpenAI's early lead there, right? So they've kind of got these two kind of competitors that are gaining ground. And Sam Altman was like, right, stop. 'Cause they're working on some other stuff, right? OpenAI, they're working on some other gadgets and some wearables and all this kind of other stuff that kind of fits in and around their ChatGPT. But Sam's basically gone, right, stop, stop everything. Down tools on everything. Everyone's all in back on ChatGPT here 'cause we need to accelerate Um, the kind of evolution of our product because the others are catching up.

It's always tough as being on top. NVIDIA and OpenAI.

Yeah. Well, I tell you, especially for OpenAI, when you've got the hyperscale tech giants like Google in your race, that's, that's tough, tough to compete.

Alright, well look, we'll wrap it up there. Any points that you have to add or questions, anything like that, feel free to drop us a question if you're listening on Spotify or on YouTube. Otherwise, I think we've got one or two episodes left before we get to the end of the year, so stay tuned and thank you, Piers.

Yep, have a good week ahead.