Abstract

Researchers have been paying increasing attention to the rapid integration of artificial intelligence (AI) into corporate strategies. However, we know little about AI-related disclosures and their financial impacts during Initial Public Offering (IPO). This study addresses this gap in the literature by examining how AI disclosures in IPO prospectuses influence IPO underpricing. Based on a sample of 1,567 IPO prospectuses from the U.S. Securities and Exchange Commission (SEC) EDGAR database from 2021 to 2024, we employ a semi-supervised machine learning approach to construct a novel AI disclosure dictionary. Using this dictionary, we measure AI disclosures in four core sections of IPO prospectuses: the prospectus summary, risk factors, use of proceeds, and management discussion. Preliminary results show some statistical evidence on the association between AI disclosures and IPO underpricing.

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