Capital markets firms could see the cost of market data provision increase by more than 50% in 2027, partly as a result of the use of AI, according to newly published research.
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The study, conducted by Substantive Research, BCG Expand and TRG Screen, found that changes to pricing structures for 2027 from 12 of the major market vendors include an average increase of 50%.
Not only would this put market data costs considerably above inflation, it also shows that market data costs are rising much faster than company's budgets - market data spend only increased by around 7% in 2026.
This is especially concerning, according to Substantive, because data is fast becoming the "must-have lifeblood" of both buy and sell-side firms.
However, the data supply agreements are typically negotiated on a bilateral basis in what Substantive describes as an "opaque" market in which the market data vendors have "significant brand and pricing power".
The research also showed considerable variety in the additional charges for AI services, which ranged from $30,000 to $1m.
The demand for AI-related services such as model context protocols and direct data feeds into large language models has driven data vendors to develop new services but the report warns that some clients are being steered toward "new commercial structures that can limit flexibility and create technical lock-in" as well as a rise in cost.
Mike Carrodus, CEO of Substantive Research, commented: “It’s not surprising that we are seeing continued M&A, spin-offs and consolidation amongst providers as it’s clear that AI represents danger and opportunity in equal measure for data vendors," said Mike Carrodus, CEO of Substantive Research.
"The first instinct from many is to control usage and change pricing, but even in a market where vendors often have the leverage, this is still a two-way conversation, and it is only just beginning. Some supply discussions we are seeing amongst clients are starting from very high bases, some of up to 300% higher costs from certain vendors, before they are negotiated down to an average of 50%.
"This highlights how nascent these discussions are and how far apart both sides are before reaching a deal," said Carrodus. "Data budgets often run into seven figures for larger firms, so we are talking about significant extra costs from the inclusion of AI in the data market, and this is setting the tone for how these agreements will be reached in future.”