How good is AI at building investment banking models?

In this episode, Debs and Graham put Claude for Excel to the test by prompting it to construct a full merger model from scratch, using GameStop's $56 billion bid for eBay as the live case study, but with the focus squarely on the AI workflow rather than the deal itself.

Graham walks through the merger model framework from first principles before opening Claude for Excel and giving it a single instruction: build me a merger model for the proposed acquisition.

What follows is a live demonstration of what AI can and cannot do in a real M&A modelling workflow.

The verdict is nuanced. Claude sources factual data quickly, structures the model sensibly, makes a credible first pass at sources and uses, and saves the kind of analyst time that used to go into manual press release scrubbing and 10-K data extraction.

But it also makes errors that anyone trained in proper modelling would catch immediately, hardcoded assumptions buried in cell formulas, fiscal year mismatches between acquirer and target, missing synergy inputs that were publicly disclosed, and modelling practices that would never pass a senior banker's review.

The takeaway: Claude for Excel is a powerful first-pass tool that can compress hours of analyst work into minutes, but it is dangerous in the hands of anyone who cannot audit the output.

The fundamentals of modelling, accounting and finance still matter - arguably more than ever, because the cost of accepting AI output without scrutiny is now embedded in every workflow.

Key Discussion Points:

Merger model framework: accretion, dilution, sources and uses, pro forma adjustments, LTM calendarisation.

Prompting strategy: what a minimal prompt produces versus what structured prompting would deliver.

Where AI saves time: factual data sourcing, model structure, first-pass build.

Where AI fails: modelling best practices, hardcoded inputs, technical errors, judgement calls.

Stress-testing in real time: how to use AI to iterate on synergy, consideration mix and financing assumptions.

AI in finance careers: why the fundamentals matter more than ever in an AI-enabled workflow.

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Every AI product you use runs on semiconductors. And for the last several years, the narrative has been almost entirely about Nvidia.

But Q1 2025 results are painting a more nuanced picture and for the first time, the question of whether Nvidia's dominance is structural or temporary feels like a live debate rather than a hypothetical.

In this episode, Debs and Graham go inside the semiconductor industry from first principles, mapping out who does what across the AI chip ecosystem before turning to the latest results and what they mean for valuations.

Graham explains how GPUs, CPUs and memory chips work together to power AI, covering why the parallel computational demands of AI models require so much chip capacity, why that has driven up the price of consumer memory, and why Nvidia's software ecosystem creates a lock-in that competitors are only now beginning to challenge seriously.

Debs then walks through the competitive landscape in detail: Broadcom winning custom chip mandates from Google and Meta on energy efficiency grounds, AMD posting 57% data centre revenue growth, TSMC delivering 41% revenue growth with 66% margins, Samsung flagging memory supply constraints into 2027, and Intel up 150% year to date on the back of a foundry pivot and reported talks with Apple.

The valuation discussion unpacks why chip designers like AMD trade at a premium to manufacturers like TSMC despite TSMC's superior margins, the role of CapEx intensity and cash conversion in driving that gap, and the Taiwan geopolitical risk discount embedded in TSMC's 18x multiple.

The episode closes with Debs and Graham weighing whether semiconductor valuations reflect genuine AI demand or a market that has run ahead of itself, and flags Nvidia's own results on 20 May as the next major test.

Key Discussion Points:

Semiconductor ecosystem: GPUs, CPUs, memory and custom chips, who makes what and how they work together.

Nvidia's competitive position: software lock-in, hardware leadership and the first real signs of competitive pressure.

Q1 results: AMD, Broadcom, TSMC, Samsung and Intel, what the numbers say about demand, market share and supply constraints.

Valuation framework: why growth and cash conversion drive the premium for chip designers over foundries, and what geopolitical risk does to TSMC's multiple.

Nvidia's S&P 500 weighting: how index inclusion and passive fund flows affect valuation independent of fundamentals.

Outlook: memory supply constraints into 2027, the Intel/Apple story and Nvidia's results on 20 May as the next major market catalyst.

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OpenAI has missed a revenue target in the run-up to what is expected to be one of the largest IPOs in history. Sam Altman and the company's CFO have been publicly at odds.

And behind all of this sits close to $700 billion of committed CapEx across the major hyperscalers, much of it financed through project finance structures that were built on the assumption of hyper-aggressive AI revenue growth.

In this episode, Debs and Graham use the OpenAI revenue miss as a lens to examine how AI infrastructure financing actually works, who is exposed when things wobble, and how a shortfall at the end of the chain could propagate upward.

Debs walks through the mechanics of project finance as it has been adapted for data centre construction. SPVs are set up to construct and operate individual facilities, with construction contracts and take or pay revenue agreements signed in advance to create predictable cash flows.

That predictability is what allows the SPV to finance itself at up to 90% debt, significantly more leveraged than a typical LBO, and on 15 year lease terms.

The financing is bankruptcy remote, meaning SPV investors have no direct recourse to the hyperscalers themselves.

That structure works cleanly until one of the counterparties at the end of the chain stops performing.

Oracle, which handles two thirds of OpenAI's compute commitments and carries the weakest credit rating among the major hyperscalers, is identified as the most exposed party.

A sustained revenue miss from OpenAI puts Oracle under pressure on its own SPV contract obligations, raising the prospect of a credit downgrade from just above investment grade to junk, with potential covenant implications that would compound the problem further.

The episode closes with the broader question of whether the AI infrastructure build-out is entering its first genuine stress test, and what the next 12 months of investor reporting might finally reveal about the numbers behind the narrative.

Key Discussion Points:

> OpenAI pre-IPO: what the revenue miss and exec conflict signal about the state of the business.

> Hyperscaler CapEx commitments: the scale of spending committed for 2026 and how it is being financed across public and private markets.

> Project finance mechanics: SPV structure, construction contracts, take or pay agreements, and the debt waterfall.

> Leverage and risk: why data centre project finance operates at 90% leverage and why that is only sustainable with locked-in cash flows.

> Oracle's position: credit rating, exposure to OpenAI and the domino risk within the financing chain.

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Wall Street Prep is the trusted training provider for the world's top investment banks, private equity firms, Fortune 1000 companies and business schools.

Our online training and instructor-led boot camps are direct adaptations of our corporate training, making Wall Street Prep the ideal choice for those looking to break into finance.

DISCLAIMER:

The information provided in this video is for educational and entertainment purposes only and does not constitute financial, investment, tax, or legal advice. Investing involves risk, and you may lose some or all of your capital.

Past performance is not indicative of future results. Please conduct your own due diligence or consult with a certified professional before making any financial decisions.

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This week Graham and Debs try something different.

Rather than dissecting a single deal, they go back to basics with one of the most important concepts in finance — the leveraged buyout — and build up from first principles using two of the biggest real-world examples in the market right now: the $18B acquisition of Hologic and the $55B acquisition of Electronic Arts.

Graham walks through the core LBO framework using an accessible house purchase analogy, explaining how leverage turns a 1.5x equity return into a 3x return, what drives that amplification, and what the key variables in any LBO analysis actually are.

From there the conversation covers what makes a good LBO candidate, the concept of cash conversion, how loan-to-value has evolved since the early days of private equity, and the three main value creation levers available to a private equity owner.

The second half of the episode puts theory into practice.

Graham runs a live napkin LBO on both the Hologic and EA deals — walking through sources and uses, entry multiples, debt paydown assumptions and return calculations — and asks the central question: do the numbers actually make sense?

The episode closes with a broader conversation about the evolution of private equity — from the generalist, high-leverage model of the early 90s to today's specialist, operationally-focused landscape — and what record levels of dry powder mean for returns going forward.

Key Discussion Points:

LBO fundamentals — what a leveraged buyout is, how leverage amplifies equity returns, and the key variables that drive an LBO model.

LBO candidates — what makes a business suitable for a leveraged buyout: cash conversion, recurring revenues, predictable cash flows.

Sources and uses — how deals get financed, what refinancing existing debt means and why a target's cash is a legitimate source of transaction funding.

Money multiple vs. IRR — what each metric measures and why you need both to evaluate a deal properly.

The Hologic LBO walkthrough — entry and exit multiples, debt structure, return sensitivity and the revolving credit facility question.

The EA deal — 30x entry multiple, $20 billion of debt, and why the base case numbers require a significant EBITDA growth story.

Co-investment and sovereign wealth — why mega-deals increasingly rely on structures beyond the traditional GP/LP fund.

The evolution of private equity — dry powder, multiple expansion and why operational improvement matters more than ever.

Why Wall Street Prep?

Wall Street Prep is the trusted training provider for the world's top investment banks, private equity firms, Fortune 1000 companies and business schools.

Our online training and instructor-led boot camps are direct adaptations of our corporate training, making Wall Street Prep the ideal choice for those looking to break into finance.

DISCLAIMER:

The information provided in this video is for educational and entertainment purposes only and does not constitute financial, investment, tax, or legal advice. Investing involves risk, and you may lose some or all of your capital.

Past performance is not indicative of future results.

Please conduct your own due diligence or consult with a certified professional before making any financial decisions.

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Q1 2026 delivered one of the strongest quarters on record for the major investment banks and in this episode, Debs and Graham break down exactly what drove it.

Starting with the headline numbers at Goldman Sachs, JPMorgan and Morgan Stanley - nearly $90 billion in combined revenue, up 12% year on year.

They unpack why this quarter was unusual: all three core revenue engines fired simultaneously, something that rarely happens.

The conversation moves through each division in turn.

On the M&A and ECM side, fees were up 40% year on year, with Graham making the case that pent-up demand is driving a deal pipeline that could make 2026 a record year.

Trading revenues across the top five banks came in at nearly $50 billion.

A figure that surprised even seasoned market watchers, with Debs explaining why volatility, not bull markets, is the real trading revenue driver, and why JP Morgan,

Goldman and Morgan Stanley each benefited for very different reasons.

Wealth management, meanwhile, posted quieter but resilient growth on the back of significant asset inflows.

The episode also doubles as an investment banking primer.

With Debs fresh from teaching spring week programmes at major banks, she and Graham walk through how the different divisions are structured, what each one actually does, and what a career in each area really looks and feels like.

They close with the central question: is this a one-quarter spike driven by exceptional market conditions, or the beginning of a sustained recovery for investment banking?

Key Discussion Points:

Q1 earnings overview: combined revenues, growth rates and why broad-based outperformance across all divisions is unusual.

M&A and ECM recovery: what's driving the 40% fee growth and whether the pipeline supports continued momentum.

Trading revenues: why volatility is the key driver, and how JP Morgan, Goldman and Morgan Stanley each captured it differently.

Wealth management: steady asset inflows, fee growth, and why it matters more than the headlines suggest.

Investment banking divisions explained: ECM, DCM, M&A advisory, and the difference between markets and banking roles.

Career insights: work culture, skills, deadlines, and how to think about which part of the bank suits you.

Outlook: sustained recovery or short-lived spike?

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ChatGPT vs. Claude.

Consumer vs. enterprise.

Own your infrastructure vs. lease it.

On the surface, OpenAI and Anthropic look like the same business.

Look closer and the differences are significant and they matter enormously for investors.

In this episode of WTBD, Debs and Graham go under the hood of the two most talked-about AI companies in the world, breaking down what their business models actually look like, how their revenues compare, what recent fundraising rounds tell us about their valuations, and whether there's really room for both to win.

Topics covered:

→ Business model differences: consumer vs. enterprise, API vs. subscriptions

→ Infrastructure strategy: why owning vs. leasing compute matters long-term

→ Strategic partnerships: Microsoft, Google, Amazon and what they signal

→ Revenue and cost efficiency: who's doing more with less

→ Recent fundraising: $850B vs. $380B, why the valuation gap?

→ IPO outlook: target valuations, retail investor appetite, and the $1 trillion question

→ Winner-takes-all or fragmented market? The $5 trillion AI market breakdown

Whether you're an investor weighing up the AI space, a finance professional tracking the IPO pipeline, or just trying to cut through the hype, this is the episode for you.

Why Wall Street Prep?

Wall Street Prep is the trusted training provider for the world’s top investment banks, private equity firms, Fortune 1000 companies and business schools.

Our online training and instructor-led boot camps are direct adaptations of our corporate training, making Wall Street Prep the ideal choice for those looking to break into finance.

DISCLAIMER:

The information provided in this video is for educational and entertainment purposes only and does not constitute financial, investment, tax, or legal advice.

Investing involves risk, and you may lose some or all of your capital.

Past performance is not indicative of future results.

Please conduct your own due diligence or consult with a certified professional before making any financial decisions.

WTBD Newsletter:

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Q1 2026 just delivered the most mega-deals in a single quarter, ever!

But not every deal in this bumper period is one to celebrate.

This week Deborah and Graham break down what's driving the surge in $10BN+ transactions, then go deep on one of the quarter's most talked-about deals: Unilever selling its food business, including Marmite and Hellmann's, to McCormick for $45 billion.

On the surface it looks like a bold strategic pivot.

But when you crunch the numbers, the picture gets complicated fast.

Low valuation multiples, 4x leverage, €500M+ in separation costs, and a structure that means Unilever isn't actually exiting at all, yet.

What you'll learn:

• Why Q1 2026 may be the best quarter for mega-deal M&A on record and what's really driving it

• How pent-up demand and a permissive antitrust environment are unlocking dealmaking despite geopolitical uncertainty

• Why Unilever has been systematically exiting food, and what structural pressures are hitting the whole industry

• What a Reverse Morris Trust actually is, and why it makes this more of a spin-off than a sale

• Why the Kraft Heinz deal fell apart, and what that meant for Unilever's options

• How to read the valuation: 13.8x EBITDA, 4x leverage, and what the market's 7% share price reaction tells you

• Why private equity wasn't interested, and what that says about the investment case for food businesses right now

Why Wall Street Prep?

Wall Street Prep is the trusted training provider for the world’s top investment banks, private equity firms, Fortune 1000 companies and business schools.

Our online training and instructor-led boot camps are direct adaptations of our corporate training, making Wall Street Prep the ideal choice for those looking to break into finance.

DISCLAIMER:

The information provided in this video is for educational and entertainment purposes only and does not constitute financial, investment, tax, or legal advice.

Investing involves risk, and you may lose some or all of your capital.

Past performance is not indicative of future results.

Please conduct your own due diligence or consult with a certified professional before making any financial decisions.

WTBD Newsletter:

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Elon Musk's SpaceX is reportedly preparing to file its U.S. IPO prospectus as early as this week, targeting a public listing this June.

According to new reports from the Information, advisors now predict the company could try to raise a record-breaking $75 billion, far above the $50 billion previously touted.

This would more than double the previous $29 billion record set by Saudi Aramco in 2019.

To put this figure into perspective, this single listing would surpass the total proceeds raised by every other U.S. IPO this year combined

At a projected valuation of $1.75 trillion, SpaceX would instantly become the 7th largest public company in the world.

While the final valuation and offering size won't be locked in until weeks before the June debut, the structure of the deal is already raising eyebrows.

In a significant departure from Wall Street norms, SpaceX is expected to bypass the standard six-month lockup period.

Additionally, while banks typically limit individual investors to 10% of an IPO, the retail and ultra-high-net-worth investor portion for SpaceX could remarkably exceed 20%.

In this episode of the ‘What’s The Big Deal?’ podcast, Deborah Taylor and Graham Smith discuss the unprecedented valuation, why the usual rules don't apply for Elon, and what this means for investors and capital markets.

Why Wall Street Prep?

Wall Street Prep is the trusted training provider for the world’s top investment banks, private equity firms, Fortune 1000 companies and business schools.

Our online training and instructor-led boot camps are direct adaptations of our corporate training, making Wall Street Prep the ideal choice for those looking to break into finance.

DISCLAIMER:

The information provided in this video is for educational and entertainment purposes only and does not constitute financial, investment, tax, or legal advice.

Investing involves risk, and you may lose some or all of your capital.

Past performance is not indicative of future results.

Please conduct your own due diligence or consult with a certified professional before making any financial decisions.

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