With a 300-year history dating back to Jonathan’s Coffee House in the Square Mile, the London Stock Exchange Group has survived technological upheaval before.
Activist investor Elliott is betting that the data and stock exchange group can weather the threat from AI, which has sent its shares tumbling.
While best known for running the London Stock Exchange, LSEG makes most of its money by selling data on stocks, bonds, commodities and other assets to banks, brokers and investors.
For months, investors have worried that the company’s business is at risk from powerful AI models capable of rapidly digesting and analysing data. Doubts over the value of its analytics business, as AI tools become more powerful and pervasive, have wiped more than a third off the company’s value over the past year.
Even as the threat of AI prompted sell-offs in wealth managers, insurance brokers and other legacy financial groups potentially exposed to the technology’s advance this month, the activist is reportedly unfazed.
Elliott — taking another tilt at a UK blue-chip following campaigns at BP and Anglo American — has been talking to LSEG’s leadership, according to people familiar with the matter, encouraging the group to boost its share buybacks and close the gap on profitability with its peers such as MSCI and CME Group.
Still, despite jumping on news of the activist’s stake on Wednesday, LSEG shares closed slightly down.
The group said in a statement that it “maintains an active and open dialogue with our investors, while remaining focused on executing our strategy”.
LSEG has had to transform before. Under chief executive David Schwimmer it has become a financial data giant through the 2019 $27bn acquisition of Refinitiv. The LSE itself now makes up just 4 per cent of group revenues.
Schwimmer has been resolute in his response to concerns over AI, telling investors in October that “AI cannot replicate or replace our real-time data”. LSEG’s data and analytics division accounted for nearly half of its profits in the third quarter.
The chief executive is also expected to defend the group’s complicated, diverse structure as a strength at LSEG’s annual results at the end of the month.
LSEG has argued that its collection of businesses — from its LCH clearing house to compliance unit Risk Intelligence and IFR financial journalism magazine — is an “all weather” strategy, according to one person close to the company.
“The share price has been under pressure. Elliott’s appearance might help them to articulate the strategy and show how they will unlock value — particularly by applying AI and technology across its diverse business,” another person familiar with the company’s thinking said.
Investor fears around AI were crystallised in July 2025, when San Francisco-based start up Anthropic launched its Claude for Financial Services tool, with sophisticated financial modelling capabilities.
“Ever since Claude for Financial Services launched last summer, LSEG shares have been a lightning rod for market fears about AI disruption risk,” said Tom Mills, analyst at RBC Capital Markets.
LSEG is also using AI. With Microsoft, which took a 4 per cent stake in the group in 2022, LSEG has promoted itself as offering data and AI tools to carry out financial modelling, benchmarking and other services.
But the impact has been muted.
Ian White, senior analyst at Autonomous Research, said the appeal of using LSEG for customer-facing AI is being questioned: The UK company is now “not as broad in terms of relevance and applicability as [it] thought [it was] going to be”.
White added that the AI threat is more pronounced for LSEG than other exchange groups such as Euronext and Deutsche Boerse, which make more of their money from traditional exchange businesses, rather than data and analytics.
Many analysts argue that the group will be protected from AI’s advance by its unique, proprietary data. That can be plugged into others’ models through partnerships with OpenAI, Anthropic and software group Databricks, among others.
The company’s data “is key to these models being successful,” said one person close to LSEG.
Ben Needham, UK quality portfolio manager at Ninety One, a top 20 LSEG shareholder, said the company “is now quality at a very good price and we’ve been leaning in heavily [buying] in the last few weeks.”
He added that data and software companies “have been sold off indiscriminately” in the face of AI fears.
Elliott’s position in LSEG points to its belief that the company should profit from the expected AI transformation in financial services, not falter.
Its call for more buybacks could meet some resistance from a group that completed a £1bn share buyback programme last year and finished a further £1bn in repurchases on Wednesday.
“The market is addicted to the methadone of capital returns at the moment rather than the opportunity for long-term growth,” said one person familiar with the group’s business model.
White of Autonomous said the company has the balance sheet space to consider buying back £3.5bn more in shares, which could help appease Elliott.
Cuts in areas such as “third party costs, IT expenses, consultant support”, could improve profitability, he added.
Another option to mollify the activist could be for LSEG to sell its roughly £10bn stake in Tradeweb, an electronic debt trading platform that has grown rapidly in recent years.
While other constituent parts of the group could be sold off, selling the LSE itself is not an option that Elliott has pushed for, according to people familiar with the situation.
City advisers suggested that the business could still be unpicked with Elliott’s intervention, urging a more focused approach.
For now, discussions have been friendly. But one adviser cautioned: “They kick people hard”.