David Solomon by Goldman Sachs says he is not “intelligent enough to know” if AI is a bubble, but “it’s not different” from other mania on the market

What he is sure is that “this is not different this time”.

Speaking on Friday during a technological conference in Turin, Italy, Salomon said in the remarks reported by the Financial time That this is the kind of thing you see in booms and busts. “There will be a lot of capital that has been deployed that have not provided feedback,” he said. It is no different from the operation of the investment. “We just don’t know how it will go.”

He added that he was preparing for the markets to fall a little of a remarkably long rally.

“I would not be surprised if in the next 12-24 months, we see a lowering on the stock markets, but that should not be surprising given the race we had,” said Solomon.

The S&P 500 has been in tears for most of the last five years, thanks in part to billions of dollars in AI investments and mega gains in actions carried out by technological companies such as NVIDIA. The index, which follows the wider market, has reached 190 records since 2020. At the same time, some investors have raised concerns concerning the concentration of the index, which is at a record with the best companies now representing around 40% of its total market capitalization, comparable to 20% a decade ago. The S&P 500 increased by 15% for the start of the year on Friday.

A potential AI bubble

Certain high -level names have been clear that they believe that the current investment fuzzled by AI could be a “bubble”. Friday, at the same conference in Turin, the founder of Amazon and executive president Jeff Bezos said that AI was “a kind of industrial bubble as opposed to financial bubbles”. This means that the massive quantities of capital invested in AI will bring positive results for the company, even if the equity prices drop in ultimately, he said. Bezos underlined the large-scale investment in the fiber optic cable that came out of the Dot-Com bubble as an example of an advantage that survived some of the companies of that time.

Others, like the CEO of Openai, Sam Altman, have also apparently recognized the possibility that AI can be in a bubble, but have tried to bring concerns.

“Between the 10 years that we have already operated and the many decades ahead of us, there will be booms and busts,” Altman said in a new giant data center in Texas, when he was asked about a potential AI bubble this week. “People will be too reinvested and will lose money, and subintent and will lose a lot of income.”

In August, Altman sent undulations to the market when he said the real “bubble” word and a day later, all the magnificent 7 companies saw sales, lowering the Nasdaq, heavy with technology, and the S&P 500 down of what has become a market of several days.

For his part, Salomon said on Friday that he was interested in seeing how AI would increase productivity and predicted that “labor affairs will be transformed by AI in the world”.

Goldman is one of the many companies incorporating AI into its operations. Its software engineers have seen a 20% increase in the use of AI coding assistant tools, said the World Engineering Manager in the Banking and Markets Division Melissa Goldman, said Initiate of Business. The company also has an internal version of Chatgpt as well as a “banking co -pilot” tool that certain workers in its banking division of investment use to work with information protected by initiates such as transmission data.

“We are at the start of the film, not at the end of the film,” said Salomon.

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