Upstart Holdings Targets Banking Sector with AI-Driven Charter Application

Upstart Holdings (NASDAQ: UPST) is pivoting its business model toward direct banking, announcing plans to apply for a national bank charter. This strategic shift would allow the company to accept consumer deposits and fund loans internally, moving beyond its current role as a third-party originator for banks and funding partners. The company leverages an AI-driven credit assessment model that analyzes over 2,500 data points, contrasting with the traditional FICO system's five core metrics. This high level of automation allowed Upstart to handle 91% of all loan applications autonomously during the fourth quarter of 2025, significantly reducing the need for human intervention. Financial performance in 2025 was robust, with revenue reaching a record $1.04 billion, representing a 64% increase over 2024. The company also achieved a GAAP net income of $53.6 million, a significant recovery from the $128.5 million net loss reported in the prior year. Loan originations surged 115% to 1.5 million loans, with a total dollar value of $11 billion, up 86%. While the stock has faced a 40% decline in the current year, the company is diversifying its portfolio. Upstart has seen fivefold growth in its automotive and home equity line of credit (HELOC) segments. The transition to a chartered bank could fundamentally alter the company's cost of capital and open new revenue streams in a global origination market estimated at $25 trillion.