J.Just over a year ago, David Schwimmer, the head of the London Stock Exchange Group, joined Microsoft boss Satya Nadella on stage at the World Economic Forum in Davos to tout the benefits of artificial intelligence.
At Davos last month, Nadella was instead discussing AI in front of an audience with Rishi Sunak, and Schwimmer was spotted on the sidelines, apparently waiting to speak to them after the event was over.
This is a turnaround that sums up the reversal of fortune caused by AI suffered by LSEG between the two editions of the forum.
Shares in London-listed LSEG, which hit a record high of around £121 each shortly after Davos last year, have since fallen as low as £71.70 each amid investor fears. that its massive data and analytics division, which is at the heart of Schwimmer’s strategy for the group, is about to be eaten up by the rapid development of AI models.
Ironically, LSEG has formed AI-focused partnerships with several US technology companies whose products are now seen by some investors as an existential threat to the UK business.
These partners include Nadella’s Microsoft, which has made a decision 4 percent stake in the British company as part of a ten-year strategic merger announced in December 2022, under the terms of which LSEG agreed to spend $2.8 billion on cloud services from the American group.
Another LSEG collaborator is Anthropic, which last week released several new AI tools that caused a sharp sell-off in stocks of LSEG and other information and analytics-focused companies, including the London-listed Relx Group and Experian Group.
Satya Nadella, CEO of Microsoft, in Davos
FABRICE COFFRINI / AFP VIA GETTY IMAGES
Schwimmer, 56, would argue that the stock market got it wrong. Rather than posing a threat, LSEG believes the rise of AI makes the vast pool of proprietary data it possesses more valuable as it powers AI models. The company’s view is that giant technology groups cannot replicate the real-time data they collect and that AI systems such as Anthropic’s Claude are new distribution channels through which LSEG can reach its customers, while strictly controlling access to its data.
Ben Bathurst, an analyst at RBC Capital Markets, a securities broker, said LSEG had “made a very consistent case about the advantage they have in their business”.
The challenge for Schwimmer is convincing nervous investors. The emergence of the activist hedge fund Elliott registered in the LSEG shareholder register presents another potentially tricky test for Schwimmer.
Florida-based Elliott has a fearsome reputation for building stakes in companies and then aggressively pushing for changes in strategy. It emerged on Wednesday that the US company had targeted LSEG in a bid to improve the company’s performance.
One path Elliott wants LSEG bosses to follow is a multibillion-pound share buyback, according to the Financial Times, which was first to report the hedge fund’s intervention. It was only on Wednesday that LSEG completed the £1bn share buyback announced last October.
Elliott’s intervention presents another irony. LSEG owns the London Stock Exchange, making the company a key manager of the UK stock market, where LSEG shares are traded.
The London Stock Exchange is only a tiny part of the LSEG
HANNAH MCKAY/Reuters
The London market has been a fertile hunting ground for activist investors, including Elliott, in recent years as British stocks have been undervalued compared to their overseas counterparts. Today, LSEG itself, after suffering a drop in its share price, finds itself battling an activist. This is the second time in less than a decade that the group has been undermined by a hedge fund, after the British activist firm TCI unsuccessfully tried to intervene in the management of LSEG in 2017, before Schwimmer took over as CEO of the group.
Schwimmer and other members of the firm, including Dame Julia Hoggett, who runs the firm’s foreign exchange business, were strong advocates for regulatory reform making the UK market more attractive both to international investors and to companies wishing to list on the stock exchange.
Partly as a result of his efforts, the Financial Conduct Authority has taken a series of steps to relax City rules to boost London’s attractiveness, particularly as a location for new listings, where activity has seen a significant slowdown since the last IPO boom in 2021.
Nonetheless, the problems facing the UK stock market have drawn attention to the fact that the 328-year-old exchange, from which LSEG takes its name, is now only a tiny part of the group. LSEG’s equities business, which mainly involves the London Stock Exchange, accounted for just £236m of the group’s £8.6bn revenue in 2024.
This has raised questions in the city about LSEG’s management of the exchange, although Schwimmer insisted last summer that the London Stock Exchange was “an essential part” of the business.
Despite this, his strategy has focused on transforming LSEG into a data and analytics giant, primarily through a $27 billion buyout of the company. financial data company Refinitiv agreed in 2019 that this was Schwimmer’s first major strategic step after becoming CEO.
It is this side of the group, which generated around £4bn of LSEG revenue in 2024, that investors fear could face an AI crisis.
Several analysts believe the LSEG selloff is an overreaction. An LSEG institutional shareholder told the Times that the common factor among all stocks affected by AI concerns “is that the companies in question have very limited means to prove that the narrative is false, or even true.”
“It will be a few years before we really know, but the market is now deciding to price in the risks.”
The activist investor is feared and respected
When Elliott Management comes to town, companies typically prepare for a whirlwind of change.
The US hedge fund rarely holds back when taking on some of the world’s most famous companies in need of a turnaround, with Elliott’s often aggressive activist stances both feared and respected in the business world.
Elliot’s latest plot targets the London Stock Exchange Group, with the hedge fund encouraging LSEG to launch a stock buyback worth billions and bring its profit margins more in line with those of rival companies, according to the Financial Times.
But LSEG is just the latest in a long line of companies to find themselves the focus of Elliott’s attention since the hedge fund was founded by billionaire Paul Elliott Singer in 1977.
Singer, 81, opened Elliott with an initial investment of just $1.3 million. The hedge fund began life investing in convertible bonds, before turning its attention to what it identifies as struggling companies with “undervalued” stocks.
As of December 2025, Elliott managed nearly $80 billion in assets worldwide, with an average annual return of about 14% per year, and claims to have lost money only twice in its history, in 1998 and 2008.
Paul Elliott Singer founded Elliott Management in 1977
GETTY IMAGES
Last year was particularly busy for the activist investor, which shelled out nearly $20 billion to launch 18 separate campaigns.
But Singer’s hedge fund, now one of the oldest and largest in the world, is never far from controversy, with its investment choices not always welcomed by management.
The company spent 15 years in a legal battle with the Argentine government over non-payment of bonds, going so far as to seize one of the country’s warships as it docked in Ghana, before finally reaching a deal under which Elliott received $2.4 billion in compensation.
In the United Kingdom, Elliott has already called on the National Express coach company to effectively separate, encouraged the supermarket chain Morrison to sell its property assets and recommended hotel giant Whitbread split its Costa Coffee and Premier Inn brands.
In 2021, the hedge fund wrote a letter to the energy supplier SSE criticizing SSE’s “adequacy of corporate governance” and “persistent share price underperformance”, after executives rejected Elliott’s proposals to spin off the company’s sprawling renewables business.
Over the past year, Elliott has invested in companies like P.A.Shell and PepsiCo. The company also owns the Waterstones and Barnes & Noble bookstore chains, and is rumored to be considering listing those bookstores on the London Stock Exchange rather than the New York Stock Exchange.
Elliott’s latest venture comes at a crucial time for LSEG. The company’s shares have fallen by more than a third over the past year as fears about new AI capabilities have sparked a massive selloff among data and software companies.
The hedge fund has not asked LSEG to consider a full sale or spin-off of its stock trading business, but its presence will nonetheless put additional pressure on LSEG CEO David Schwimmer, 56, to deliver results.
LSEG will release its preliminary annual results on February 26.