Texas launched its own stock exchange Friday, marking the most direct challenge yet to the NYSE-Nasdaq duopoly. The Texas Stock Exchange (TXSE) began live trading at 9:30 a.m. after practice runs by Goldman Sachs and Citadel Securities using mock symbols. The project traces to a fall 2022 dinner in Houston where Governor Greg Abbott pitched the idea to James Lee, the former Citadel executive now building the venue.

TXSE arrives amid an IPO surge — SpaceX's $86 billion offering stands as the largest ever — with AI giants OpenAI and Anthropic potentially listing within months. Financial backers include BlackRock, Charles Schwab, and Fortress Investment Group, signaling Wall Street appetite for an alternative venue. The exchange plans to list Texas-domiciled companies first, leveraging the state's campaign to lure corporate headquarters from Delaware and New York.

Texas has spent years constructing a parallel financial infrastructure, including specialized business courts to rival Delaware's Court of Chancery. TXSE's launch accelerates that strategy, offering companies a home-state listing option with potentially looser regulatory overhead. Yet the exchange faces steep liquidity hurdles; Nasdaq required two decades to compete seriously with the NYSE.

For investors, TXSE's viability hinges on whether major issuers — particularly the coming wave of AI unicorns — choose Texas over New York for their public debuts. If even a fraction of the projected IPO pipeline migrates, the duopoly's pricing power on listing fees and market data could erode faster than incumbents expect.