AI-Driven Seat Count Deflation: Impact on Financial Data Providers like Morningstar, FactSet, and LSEG

A Reddit post argues that financial data stocks like Morningstar (MORN), FactSet (FDS), and London Stock Exchange Group (LSEG) are facing drawdowns due to AI-driven seat count deflation—AI allows one analyst to perform the work of 3-5, reducing demand for per-seat subscriptions. Evidence includes layoffs at Citigroup and Morgan Stanley.

• Morningstar (MORN):
  2.23% decline from October 26 to November 26, 2025 [0].
• FactSet (FDS):
  2.85% decline over the same period [0].
• LSEGY:
  SeekingAlpha reports a 16.27% decline (period unspecified), while LSEG’s London listing (LSEG.L) dropped ~1.5% recently [1][3].
• Sector Context:
  Financial Data & Stock Exchanges sector shows modest negative performance aligning with AI disruption concerns.

• Morningstar:
  Market cap $9.14B, P/E ratio 24.25x, ROE 23.66%. Licensed revenue accounted for 71.4% of FY2024 total [0].
• FactSet:
  Market cap $10.6B, P/E ratio17.68x, ROE28.46%. User count rose to over 220k in Q3 2025, primarily driven by wealth management users [0][5].
• LSEGY:
  Market cap $59.55B, dividend yield1.55% [3].

• FactSet:
  21% increase in tech expenses for GenAI investments, with 10% improvement in engineering output via AI tools [5].
• Morningstar:
  AI integration mentioned but no specific efficiency gains disclosed [2].
• Banks:
  Bloomberg Intelligence survey expects average3% workforce cuts by2030 due to AI, with 1/4 expecting5-10% reductions [2].

1. Exact seat count changes for Morningstar and FactSet (core to validating the Reddit post’s claim).
2. Citigroup’s 2025 analyst layoff numbers (only general survey data available).
3. LSEG’s subscription metrics impact from AI.

• FactSet’s wealth management user growth suggests diversification beyond analyst seats, mitigating seat count deflation risk.
• Morningstar’s high licensed revenue share (71.4%) makes it more vulnerable to seat count declines than FactSet.

##5. Risk Considerations & Factors to Monitor

• Seat Count Deflation:
  Declining analyst headcount could impact licensed-based revenue for Morningstar and FactSet [0][6].
• AI Competition:
  Established providers risk being outpaced by AI-native entrants if innovation lags [5].
• Layoff Impact:
  Morgan Stanley’s 2000 layoffs and Citigroup’s planned cuts may reduce subscription demand, but exact analyst role numbers are unclear [1][2].

1. Quarterly seat count updates from Morningstar and FactSet.
2. FactSet’s GenAI project outcomes (e.g., Pitch Creator adoption) [5].
3. Exact analyst layoffs at Citigroup and Morgan Stanley.
4. LSEG’s AI strategy disclosure.

[0] Ginlix Analytical Database
[1] Business Insider: Morgan Stanley Layoffs 2025
[2] Exploding Topics: AI Replacing Jobs Stats 2025
[3] SeekingAlpha: LSEGY Stock Overview
[5] FactSet Q3 2025 Earnings Transcript
[6] Morningstar Q3 2025 Financial Results