Solomon shifted to AI just minutes into the Goldman Sachs Group, Inc. Q1 2024 earnings call, saying that the topic has come up in “virtually every client conversation that I have.”

While McKinsey has predicted that AI technologies could “potentially unlock $1 trillion of incremental value for banks” by speeding up human decision-making, Solomon focused on another way banks can reap the benefits of AI — by the increased need for financing that it will present.

“To the extent that this technology develops in line with expectations, there will be significant demand for AI-related infrastructure and, as a result, financing, which will be a tailwind to our business,” Solomon said.

Taking care to still touch on internal applications, he added that Goldman currently has a leading team of engineers dedicated to exploring and applying machine learning and AI applications, but also urged caution.

“Like with any emerging technology, a thoughtful approach and keen eye on risk management will be crucial.”

When asked about what’s hype vs. what’s real, Solomon refused to compare current AI enthusiasm to the Internet explosion in 1999-2001 that resulted in the dotcom bubble, instead focusing on the “unprecedented” opportunity for corporates and governments alike:

“We’re talking about a level of scale that is candidly unprecedented … This is not a quarter-to-quarter thing, this is over the next five to 10 years, and we're very, very focused on it and very engaged. And by the way, it's not just companies, it's governments, obviously, that are making enormous investments in bringing infrastructure into their locale. And so, all of this is something that we're very strategically focused on.”

Indeed, many companies are spending significant amounts of money on AI — Google deepMind CEO Demis Hassabis said during a TED conference in Vancouver on Monday that Google will be investing more than $100 billion “over time” on AI, according to Bloomberg. This comes a month after it was widely reported that Microsoft will spend $100 billion on just a single data center for OpenAI. And last week came the news that Elon Musk’s X.AI Corp. is looking to raise $3 to $4 billion in a deal that would value the company at $18 billion, according to materials sent to investors. 

Looking at public sector spend, the Brookings Institute released a report in March detailing the U.S. federal government’s rapidly accelerating AI investments over recent years. 

This is backed up by President Joe Biden’s proposed fiscal year 2025 federal budget, which includes more than $3 billion dispersed across agencies to develop, test, procure, and integrate transformative AI applications across the federal government. The budget also includes a mandatory allocation to “increase agency funding for AI, both to address major risks and to advance its use for public good.”

While Goldman may not benefit from AI as directly as data center developers, David Solomon’s excitement does appear warranted.