1 00:00:02,520 --> 00:00:07,080 Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. 2 00:00:07,360 --> 00:00:10,840 Speaker 2: We can cross over now to Turin, where, of course, 3 00:00:10,960 --> 00:00:15,400 Speaker 2: are Tom McKenzie speaking to David Solomon the Interview of 4 00:00:15,480 --> 00:00:16,439 Speaker 2: the Day here it. 5 00:00:16,360 --> 00:00:20,000 Speaker 3: Is it's given the geopolitical strains given now as well 6 00:00:20,000 --> 00:00:24,320 Speaker 3: the shutdown in the US. David, does the US economy 7 00:00:24,480 --> 00:00:27,440 Speaker 3: weather the current political standoff in Washington and does that 8 00:00:27,480 --> 00:00:31,840 Speaker 3: resilience that we've seen this year continue into twenty twenty six. 9 00:00:32,560 --> 00:00:34,640 Speaker 4: Well, first, thank you for having me here. Delighted to 10 00:00:34,640 --> 00:00:39,120 Speaker 4: be here. The US economy is in pretty good shape, 11 00:00:39,520 --> 00:00:43,559 Speaker 4: and there are some very very strong tailwinds that have 12 00:00:43,640 --> 00:00:45,519 Speaker 4: really had a profound effect. And there are also some 13 00:00:45,560 --> 00:00:48,840 Speaker 4: things going on that are creating headwinds and are probably 14 00:00:48,960 --> 00:00:53,519 Speaker 4: leading the economy to underperformance expectations this time. But I'm 15 00:00:53,560 --> 00:00:56,240 Speaker 4: optimistic that we're probably going to see an acceleration as 16 00:00:56,240 --> 00:00:59,240 Speaker 4: we continue to add into twenty twenty six. The big 17 00:00:59,280 --> 00:01:02,280 Speaker 4: structural issue that's kept the US economy going so well 18 00:01:02,320 --> 00:01:04,959 Speaker 4: as the US and by the way, other developed economies 19 00:01:04,959 --> 00:01:08,959 Speaker 4: around the world are running very aggressive fiscal stimulus plays. 20 00:01:09,640 --> 00:01:13,839 Speaker 4: Governments are spending enormously into economies in the developed world, 21 00:01:14,440 --> 00:01:16,679 Speaker 4: and that keeps the economy going even when you have 22 00:01:16,760 --> 00:01:20,440 Speaker 4: other headwinds. Second big macro phenomenon that's affecting the US 23 00:01:20,480 --> 00:01:23,600 Speaker 4: economy is all of the AI infrastructure build, all the 24 00:01:23,640 --> 00:01:26,600 Speaker 4: capital spending, all that's going into the ground to support 25 00:01:27,160 --> 00:01:30,840 Speaker 4: the deployment, the development, the continued growth of AI infrastructure 26 00:01:30,840 --> 00:01:32,959 Speaker 4: into the enterprise, and that's a big tail wind too. 27 00:01:34,040 --> 00:01:37,200 Speaker 4: That's balanced on the other side by the implementation of 28 00:01:37,240 --> 00:01:39,720 Speaker 4: the trade policies, which are still getting absorbed. 29 00:01:40,360 --> 00:01:42,000 Speaker 5: I think we're seeing, you know, some of the. 30 00:01:42,000 --> 00:01:45,360 Speaker 4: Effects from trade, but you know, there's still more to 31 00:01:45,400 --> 00:01:47,920 Speaker 4: go in terms of really understanding how the trade policy 32 00:01:48,000 --> 00:01:51,360 Speaker 4: is fully implemented and how it balances growth. And then 33 00:01:51,360 --> 00:01:54,080 Speaker 4: obviously the world's a little bit more geopolitically fragile and 34 00:01:54,120 --> 00:01:55,560 Speaker 4: that has an impact on growth and. 35 00:01:57,560 --> 00:01:58,680 Speaker 5: You know, kind of confidence. 36 00:01:58,960 --> 00:02:01,120 Speaker 4: But when you balance it all and you saw the 37 00:02:01,160 --> 00:02:04,640 Speaker 4: third quarter reading was quite strong, but year over year 38 00:02:05,080 --> 00:02:08,000 Speaker 4: from last December to this December, the overall growth trajectory 39 00:02:08,040 --> 00:02:09,880 Speaker 4: it will probably be a little bit less than two percent, 40 00:02:10,320 --> 00:02:13,800 Speaker 4: and so that's slightly below trend, but still in pretty 41 00:02:13,800 --> 00:02:14,760 Speaker 4: good shape. 42 00:02:14,880 --> 00:02:16,640 Speaker 1: And then the acceleration into twenty twenty seven. 43 00:02:17,240 --> 00:02:20,720 Speaker 4: I think that as the trade policies are absorbed and 44 00:02:20,760 --> 00:02:23,720 Speaker 4: you have the continued stimulus and the continued kind of 45 00:02:23,760 --> 00:02:26,920 Speaker 4: tech spend, You've got a pretty good tailwind. You know, 46 00:02:26,960 --> 00:02:29,919 Speaker 4: I hear as I talk to CEOs that would kind 47 00:02:29,919 --> 00:02:32,440 Speaker 4: of have their finger on the pull. Certainly, the upper 48 00:02:32,520 --> 00:02:35,079 Speaker 4: end of the economy is still spending quite strongly, a 49 00:02:35,120 --> 00:02:37,639 Speaker 4: little bit more constraint on the downside on the you know, 50 00:02:37,720 --> 00:02:39,080 Speaker 4: the lower part of the economy. 51 00:02:39,560 --> 00:02:40,880 Speaker 5: But I think the things you have to watch. You 52 00:02:40,880 --> 00:02:41,639 Speaker 5: have to watch labor. 53 00:02:41,720 --> 00:02:43,960 Speaker 4: There's no question labor shorts is a little bit softer, 54 00:02:44,040 --> 00:02:46,880 Speaker 4: and the FEDS watching labor carefully. And you know, I 55 00:02:46,880 --> 00:02:49,079 Speaker 4: think you've also got to watch inflation and whether or 56 00:02:49,160 --> 00:02:51,880 Speaker 4: not the impact of trade is just a one time 57 00:02:51,960 --> 00:02:55,639 Speaker 4: price movement or there's something you know, more significantly comes 58 00:02:55,639 --> 00:02:56,720 Speaker 4: through and it's too early to know. 59 00:02:56,960 --> 00:02:59,520 Speaker 3: And you touched on labor, how would you character rise 60 00:03:00,120 --> 00:03:02,120 Speaker 3: the health of the US job market right now? 61 00:03:02,320 --> 00:03:04,680 Speaker 4: It's a little bit it's a little bit softer, And 62 00:03:04,760 --> 00:03:06,600 Speaker 4: I think you can step back and you can understand 63 00:03:06,639 --> 00:03:08,799 Speaker 4: why when you think about big enterprises and what's going 64 00:03:08,800 --> 00:03:12,560 Speaker 4: on with technology, people are pausing hiring to really kind 65 00:03:12,600 --> 00:03:15,240 Speaker 4: of evaluate how as they bring this technology into the 66 00:03:15,320 --> 00:03:20,640 Speaker 4: enterprise they can automate, create efficiencies, reinvest and so you know, 67 00:03:20,680 --> 00:03:22,799 Speaker 4: I think at the moment that slowed hiring and as 68 00:03:22,800 --> 00:03:24,480 Speaker 4: a result, you know, the labor number is a little 69 00:03:24,480 --> 00:03:24,880 Speaker 4: bit softer. 70 00:03:25,120 --> 00:03:27,360 Speaker 3: The Federal Reserve interest rates for the first time this 71 00:03:27,520 --> 00:03:30,960 Speaker 3: year in September last month. The markets are expecting another 72 00:03:31,040 --> 00:03:33,760 Speaker 3: approximately four cuts between now and this time next year, 73 00:03:33,919 --> 00:03:36,960 Speaker 3: another one percentage point of cuts, with inflation remaining above 74 00:03:37,000 --> 00:03:37,720 Speaker 3: the target for the Fed. 75 00:03:37,880 --> 00:03:39,280 Speaker 1: Does that seem reasonable to you? 76 00:03:39,920 --> 00:03:43,680 Speaker 4: I think it's in the distribution of outcomes, you know. 77 00:03:43,720 --> 00:03:45,360 Speaker 4: I think we'll have to watch. I know, there's a 78 00:03:45,360 --> 00:03:48,000 Speaker 4: great parlor game of people kind of predicting what the 79 00:03:48,000 --> 00:03:51,080 Speaker 4: world's going to look like six months, you know, twelve 80 00:03:51,120 --> 00:03:51,800 Speaker 4: months out. 81 00:03:52,000 --> 00:03:53,520 Speaker 5: If you think about what the world looked like. 82 00:03:53,480 --> 00:03:55,800 Speaker 4: In April and where markets were in April and think 83 00:03:55,840 --> 00:03:57,840 Speaker 4: about where they are today, you know. 84 00:03:57,760 --> 00:03:59,960 Speaker 5: I'd just be cautious. I think that. 85 00:04:01,560 --> 00:04:05,680 Speaker 4: I think that we've got competing forces between labor and 86 00:04:05,720 --> 00:04:08,960 Speaker 4: inflation and how they balance, which is still a little 87 00:04:08,960 --> 00:04:11,200 Speaker 4: bit uncertain. We'll have an impact on whether we get 88 00:04:11,400 --> 00:04:13,240 Speaker 4: one more cut or we get, you know, two or 89 00:04:13,240 --> 00:04:14,040 Speaker 4: three more cuts. 90 00:04:14,400 --> 00:04:17,920 Speaker 3: Global stocks at record highs, US stocks at record hizs, 91 00:04:17,920 --> 00:04:19,239 Speaker 3: the s and P five on. It is up about 92 00:04:19,240 --> 00:04:22,360 Speaker 3: fifteen percent year today in Nvidia's market camp is around 93 00:04:22,400 --> 00:04:24,479 Speaker 3: four and a half trillion dollars. That's more than the 94 00:04:24,600 --> 00:04:29,800 Speaker 3: entire market camps of France, UK, Germany, Italy combined. Does 95 00:04:29,839 --> 00:04:32,880 Speaker 3: the market rally? Does this bull market? Are you comfortable 96 00:04:32,880 --> 00:04:35,960 Speaker 3: with this pool market? Given some of the concerns you flagged? 97 00:04:38,000 --> 00:04:39,240 Speaker 5: Am I am I comfortable? 98 00:04:39,400 --> 00:04:39,840 Speaker 1: You know? Yeah? 99 00:04:40,320 --> 00:04:42,920 Speaker 5: Sleep, I sleep very well. I'm not I'm not going 100 00:04:42,960 --> 00:04:44,760 Speaker 5: to bed every night and worried about what will happen next. 101 00:04:44,760 --> 00:04:49,799 Speaker 4: But markets, market's running cycles, and whenever we've historically had 102 00:04:50,040 --> 00:04:54,760 Speaker 4: a significant acceleration and a new technology that creates a 103 00:04:54,800 --> 00:04:57,680 Speaker 4: lot of capital formation and therefore lots of interesting new 104 00:04:57,680 --> 00:05:01,440 Speaker 4: companies around it, you generally see the market run ahead 105 00:05:01,440 --> 00:05:03,400 Speaker 4: of the potential because they're going to be winners and losers. 106 00:05:03,400 --> 00:05:04,680 Speaker 5: They're going to be winners and losers. 107 00:05:05,640 --> 00:05:07,440 Speaker 4: If you go back and you think about the Internet, 108 00:05:08,200 --> 00:05:11,520 Speaker 4: pick on Amazon. You know, Amazon was one of many 109 00:05:11,560 --> 00:05:14,440 Speaker 4: companies that was prosecuting that kind of opportunity. Many of 110 00:05:14,440 --> 00:05:18,280 Speaker 4: the companies went away. Amazon became an incredible company. You're 111 00:05:18,279 --> 00:05:20,760 Speaker 4: going to see a similar phenomenon here. I wouldn't be 112 00:05:20,800 --> 00:05:23,719 Speaker 4: surprised if in the next twelve to twenty four months 113 00:05:23,720 --> 00:05:26,159 Speaker 4: we see a draw down with respect to you know, 114 00:05:26,200 --> 00:05:28,960 Speaker 4: equity markets, but that shouldn't be surprising and given the 115 00:05:29,000 --> 00:05:32,200 Speaker 4: run we've had. But generally speaking, I think what's super 116 00:05:32,240 --> 00:05:35,280 Speaker 4: exciting is the technology is expanding. 117 00:05:35,440 --> 00:05:37,240 Speaker 5: New companies are being formed. 118 00:05:37,480 --> 00:05:41,400 Speaker 4: And the potential of this technology deployed into the enterprise 119 00:05:42,240 --> 00:05:44,560 Speaker 4: can be very, very powerful, and so it's an exciting 120 00:05:44,600 --> 00:05:46,440 Speaker 4: time and the market, you know, the market looks forward. 121 00:05:46,560 --> 00:05:48,600 Speaker 3: What does that mean for deal making? You've seen a 122 00:05:48,600 --> 00:05:50,520 Speaker 3: pickup in deal making, What is the scale of the 123 00:05:50,520 --> 00:05:52,200 Speaker 3: pickup you expect to see and what are you seeing 124 00:05:52,200 --> 00:05:52,839 Speaker 3: in Europe? 125 00:05:53,040 --> 00:05:59,120 Speaker 4: The pickup and deal making broadly is meaningful, but it's 126 00:05:59,120 --> 00:06:00,880 Speaker 4: particularly accel in the US. 127 00:06:01,000 --> 00:06:02,599 Speaker 5: And what's driving the. 128 00:06:02,560 --> 00:06:06,200 Speaker 4: Pickup and deal making is a changed regulatory environment. So 129 00:06:06,600 --> 00:06:10,560 Speaker 4: if you were thinking strategically and you wanted to really 130 00:06:10,640 --> 00:06:13,760 Speaker 4: expand your scale or your competitive position in almost any industry, 131 00:06:14,720 --> 00:06:17,120 Speaker 4: for the last four years in the United States, the 132 00:06:17,160 --> 00:06:19,960 Speaker 4: answer was no. From a regulatory perspective, it really wasn't. 133 00:06:20,000 --> 00:06:22,000 Speaker 4: What's the question, what could the answer be? The answer 134 00:06:22,040 --> 00:06:25,200 Speaker 4: is no, And I think CEOs at this point imagine 135 00:06:25,200 --> 00:06:30,200 Speaker 4: they're an environment where you actually can get strategic transactions 136 00:06:30,240 --> 00:06:32,000 Speaker 4: done to expand your competitive position. 137 00:06:32,120 --> 00:06:33,760 Speaker 5: And so we obviously inside Gold and. 138 00:06:33,720 --> 00:06:36,440 Speaker 4: Sachs, we have an early look at that activity in 139 00:06:36,480 --> 00:06:40,280 Speaker 4: those dialogues, and I would say it's accelerated very significantly 140 00:06:40,279 --> 00:06:41,880 Speaker 4: if you just look at the facts in terms of 141 00:06:41,920 --> 00:06:45,360 Speaker 4: what's public. We've obviously had a very significant m ANDA quarter. 142 00:06:45,400 --> 00:06:47,039 Speaker 4: We had a one trillion dollar m and A volume 143 00:06:47,120 --> 00:06:51,440 Speaker 4: quarter this past quarter. And if you look at large 144 00:06:51,440 --> 00:06:53,800 Speaker 4: cap m and A meaning m and A for companies 145 00:06:54,440 --> 00:06:56,880 Speaker 4: that are ten million dollars are larger, it's up one 146 00:06:56,960 --> 00:06:59,960 Speaker 4: hundred percent year over year. So there is real moment 147 00:07:00,400 --> 00:07:02,560 Speaker 4: in the deal making environment. I think you're going to 148 00:07:02,640 --> 00:07:06,279 Speaker 4: see an acceleration of that into twenty six for sure. 149 00:07:07,000 --> 00:07:10,280 Speaker 4: And increasingly CEOs are testing what the bounds are of 150 00:07:10,320 --> 00:07:13,840 Speaker 4: their ability to enhance their competitive position or improve their 151 00:07:13,880 --> 00:07:17,400 Speaker 4: scale and their lead where they have a leading position 152 00:07:17,440 --> 00:07:19,840 Speaker 4: in a variety of industries, and I think the regulatory 153 00:07:19,920 --> 00:07:21,520 Speaker 4: environment is going to permit that at the moment. 154 00:07:21,680 --> 00:07:22,880 Speaker 3: Okay, so it sounds like you're going to be very 155 00:07:22,880 --> 00:07:24,360 Speaker 3: busy you in the team on deal making in twenty 156 00:07:24,400 --> 00:07:27,680 Speaker 3: twenty six. What are your priorities David for Goldman and 157 00:07:27,680 --> 00:07:28,320 Speaker 3: the franchise. 158 00:07:28,320 --> 00:07:29,760 Speaker 1: Next year, well, we. 159 00:07:30,040 --> 00:07:33,440 Speaker 4: Don't really think about it, you know, next year ach 160 00:07:33,520 --> 00:07:35,800 Speaker 4: Our priorities always start with the way we face and 161 00:07:35,840 --> 00:07:38,640 Speaker 4: serve our clients. But in twenty nineteen, twenty twenty, we 162 00:07:38,760 --> 00:07:40,760 Speaker 4: late a strategic plan out for the firm and we've 163 00:07:40,800 --> 00:07:42,880 Speaker 4: been executing against it for the last six or seven years. 164 00:07:42,880 --> 00:07:45,760 Speaker 4: And as you highlighted earlier in the discussion, we've created 165 00:07:45,800 --> 00:07:48,120 Speaker 4: a lot of value because we've grown the firm. At 166 00:07:48,160 --> 00:07:49,800 Speaker 4: the end of the day, as a public company, we 167 00:07:49,920 --> 00:07:52,400 Speaker 4: have to grow. We might be a big, mature public company, 168 00:07:52,600 --> 00:07:53,600 Speaker 4: but we have to grow. 169 00:07:53,640 --> 00:07:55,320 Speaker 5: We have to grow. We have to grow our earnings. 170 00:07:55,680 --> 00:07:57,320 Speaker 4: And to do that, you know, you have to have 171 00:07:57,360 --> 00:07:59,480 Speaker 4: a coaching plan where you're investing in different parts of 172 00:07:59,480 --> 00:08:02,760 Speaker 4: the business. We have two big principal businesses, our investment 173 00:08:02,800 --> 00:08:05,160 Speaker 4: banking and trading business. Who I think there's a little 174 00:08:05,160 --> 00:08:09,760 Speaker 4: debate about our leadership position. It's an extraordinary business, very 175 00:08:09,800 --> 00:08:13,600 Speaker 4: big business. We've been investing and adding more resources to 176 00:08:13,600 --> 00:08:16,600 Speaker 4: that business over the last five six years. We've increased 177 00:08:16,600 --> 00:08:19,040 Speaker 4: our market shares very meaningfully in that business. Our market 178 00:08:19,040 --> 00:08:21,120 Speaker 4: shares are up about three hundred and fifty basis points 179 00:08:21,440 --> 00:08:23,880 Speaker 4: over the last five years in that business, and then 180 00:08:23,920 --> 00:08:27,280 Speaker 4: separately we have the fifth or sixth seventh, depending on 181 00:08:27,320 --> 00:08:30,000 Speaker 4: how you look at it, largest active asset manager in 182 00:08:30,000 --> 00:08:32,680 Speaker 4: the world. We manage about three point three three point 183 00:08:32,679 --> 00:08:36,120 Speaker 4: four trillion dollars through our asset wealth management platform. That 184 00:08:36,160 --> 00:08:39,000 Speaker 4: business is growing high single digits, is what we've put 185 00:08:39,040 --> 00:08:41,680 Speaker 4: out publicly. It's actually been growing faster than that, and 186 00:08:41,720 --> 00:08:45,120 Speaker 4: we continue to invest in a variety of aspects of 187 00:08:45,160 --> 00:08:47,280 Speaker 4: that business where we see real growth. We can grow 188 00:08:47,480 --> 00:08:49,600 Speaker 4: our wealth business, which is an ultra high net worth 189 00:08:49,679 --> 00:08:53,080 Speaker 4: wealth business. We can continue to grow our alternatives platforms, 190 00:08:53,160 --> 00:08:57,120 Speaker 4: private capital formation, and we have a very flexible solutions 191 00:08:57,160 --> 00:09:00,680 Speaker 4: business where really for big institutional capital allocators, we have 192 00:09:00,720 --> 00:09:03,440 Speaker 4: an ability to really create and customize what they need 193 00:09:03,440 --> 00:09:04,679 Speaker 4: from an investment perspective. 194 00:09:05,000 --> 00:09:06,640 Speaker 3: There's been a lot of discussion here at it Onian 195 00:09:06,679 --> 00:09:11,040 Speaker 3: Tech Week about how to get globally significant generational businesses. 196 00:09:11,080 --> 00:09:13,160 Speaker 3: Tech business is built out of Europe one hundred billion 197 00:09:13,200 --> 00:09:14,160 Speaker 3: dollar plus. 198 00:09:14,520 --> 00:09:15,840 Speaker 1: What is your prescription for that? 199 00:09:16,000 --> 00:09:19,440 Speaker 4: I mean my prescription for that is savings in Europe 200 00:09:19,440 --> 00:09:22,160 Speaker 4: and capital in Europe needs to come into the risk 201 00:09:22,240 --> 00:09:27,400 Speaker 4: economy in Europe. You just don't have the scale and 202 00:09:27,480 --> 00:09:30,880 Speaker 4: scope of the available savings here are getting deployed into 203 00:09:30,920 --> 00:09:33,760 Speaker 4: the tech risk ecosystem at the pace that it should 204 00:09:34,080 --> 00:09:36,280 Speaker 4: when you compare and you look to the way things 205 00:09:36,280 --> 00:09:38,120 Speaker 4: are deployed in the United States, and in fact, one 206 00:09:38,160 --> 00:09:40,560 Speaker 4: of the things that happens here is capital from here 207 00:09:41,080 --> 00:09:45,520 Speaker 4: looks over there, and so there are enormously smart, talented people. Here, 208 00:09:45,559 --> 00:09:49,720 Speaker 4: are lots of great ideas, capital formation, and a real 209 00:09:49,760 --> 00:09:50,839 Speaker 4: focus on risk taking. 210 00:09:50,960 --> 00:09:51,679 Speaker 5: Stuff's going to. 211 00:09:51,600 --> 00:09:53,959 Speaker 4: Go right, Stuff's going to go wrong, but you've got 212 00:09:54,000 --> 00:09:57,360 Speaker 4: to take risk, You've got to deploy capital. This really 213 00:09:57,559 --> 00:10:00,720 Speaker 4: has to become a bigger center of capital deploy And also, 214 00:10:00,800 --> 00:10:04,400 Speaker 4: the more we can get the European Union to be 215 00:10:04,480 --> 00:10:07,520 Speaker 4: operating as an economic union and taking advantage of the 216 00:10:07,559 --> 00:10:10,640 Speaker 4: four hundred plus million people that are here as opposed 217 00:10:10,679 --> 00:10:15,000 Speaker 4: to the individual states, for lack of a better term, 218 00:10:15,360 --> 00:10:17,920 Speaker 4: the more we can get the tech economy working that way, 219 00:10:18,400 --> 00:10:20,319 Speaker 4: I think, the better chance we have of reaching your goal, 220 00:10:20,320 --> 00:10:22,120 Speaker 4: which I think would be a very noble goal for 221 00:10:22,160 --> 00:10:24,320 Speaker 4: the world. So I mean, the more the more innovation 222 00:10:24,360 --> 00:10:25,440 Speaker 4: over here, the better for the world. 223 00:10:26,040 --> 00:10:27,600 Speaker 1: So us to live on the line will be here. 224 00:10:27,720 --> 00:10:30,720 Speaker 3: So your one message to the European Commission president would 225 00:10:30,720 --> 00:10:36,640 Speaker 3: be centralizing or capital most certainly the urgency. 226 00:10:36,840 --> 00:10:40,240 Speaker 4: I you know, I'm feeling more urgency when I'm over here. 227 00:10:40,280 --> 00:10:44,079 Speaker 4: But still, you know, the regulatory process in Europe is slow. 228 00:10:44,920 --> 00:10:48,160 Speaker 4: Capital markets Union for sure, you know, more encouragement of 229 00:10:48,240 --> 00:10:51,160 Speaker 4: risk taking in capital markets, trying to bring it all together. 230 00:10:51,679 --> 00:10:54,800 Speaker 4: Consolidation in the banking system instead of national champions in 231 00:10:54,840 --> 00:10:58,560 Speaker 4: every market, consolidation and the exchange system instead of champions 232 00:10:58,559 --> 00:11:01,520 Speaker 4: in every market. You know, those are all things that 233 00:11:01,600 --> 00:11:04,760 Speaker 4: will make capital formation easier, risk capital formation better, and 234 00:11:04,800 --> 00:11:09,160 Speaker 4: will allow the acceleration of great companies here in these markets. 235 00:11:09,320 --> 00:11:11,320 Speaker 1: You have lennin to tech and into AI. 236 00:11:11,679 --> 00:11:14,040 Speaker 3: Your team at tell them you have twelve thousand engineers 237 00:11:14,320 --> 00:11:17,120 Speaker 3: across Goldman Sachs. You have an AI the Golden SACS 238 00:11:17,160 --> 00:11:20,320 Speaker 3: AI assistant, you have an AI developer. What parts of 239 00:11:20,360 --> 00:11:22,520 Speaker 3: the business, and you've talked about some of them, whether 240 00:11:22,559 --> 00:11:24,680 Speaker 3: it's well for asset management or trading or the consumer. 241 00:11:24,880 --> 00:11:26,400 Speaker 3: What parts of the business at Goldman are going to 242 00:11:26,400 --> 00:11:28,040 Speaker 3: be most transformed by AI? 243 00:11:28,440 --> 00:11:31,600 Speaker 4: Well, I think you know the business of work is 244 00:11:31,600 --> 00:11:33,400 Speaker 4: getting transformed by AI broadly. 245 00:11:33,600 --> 00:11:37,960 Speaker 5: And you know we are at our HeartWare professional services firm. 246 00:11:38,000 --> 00:11:39,800 Speaker 4: If you think about Goldman Sachs and the value it 247 00:11:39,840 --> 00:11:43,440 Speaker 4: brings to its clients, its value is deployed really among 248 00:11:43,880 --> 00:11:48,880 Speaker 4: three different things. People, capital, technology, and so if you 249 00:11:48,920 --> 00:11:55,080 Speaker 4: think about AI, you know, AI really allows smart, talented, driven, 250 00:11:55,160 --> 00:11:58,560 Speaker 4: sophisticated people to be more productive, to touch more people 251 00:11:58,600 --> 00:12:02,040 Speaker 4: that have better information. Is they're dismall better analysis. I mean, 252 00:12:02,080 --> 00:12:03,920 Speaker 4: this is a journey we've been on. You know, this 253 00:12:04,000 --> 00:12:06,720 Speaker 4: technology accelerates it. But when I started forty two years 254 00:12:06,720 --> 00:12:09,760 Speaker 4: ago and I wanted to look at five different companies 255 00:12:09,800 --> 00:12:12,160 Speaker 4: and think about how to compare the trading in five 256 00:12:12,160 --> 00:12:13,719 Speaker 4: different companies, I had to go to the library, I 257 00:12:13,720 --> 00:12:14,079 Speaker 4: had to go. 258 00:12:14,000 --> 00:12:14,760 Speaker 5: To the microfiche. 259 00:12:14,760 --> 00:12:18,360 Speaker 4: I'd spend hours really thinking about how to put that 260 00:12:18,400 --> 00:12:21,000 Speaker 4: comparison together. Obviously, today you can do it in a 261 00:12:21,000 --> 00:12:24,160 Speaker 4: fraction of a second speaking into your phone. So this 262 00:12:24,280 --> 00:12:29,000 Speaker 4: journey and providing tools to super super productive people and 263 00:12:29,040 --> 00:12:32,280 Speaker 4: giving them more capacity to serve their clients and to 264 00:12:32,320 --> 00:12:35,040 Speaker 4: be more productive is obvious. And we've been working on 265 00:12:35,080 --> 00:12:37,840 Speaker 4: all those tools as most enterprises have. I think the 266 00:12:37,880 --> 00:12:42,079 Speaker 4: more interesting thing for enterprises broadly, and this isn't unique 267 00:12:42,120 --> 00:12:45,239 Speaker 4: to gold and Sachs, because the world is underpinned by technology. 268 00:12:45,800 --> 00:12:50,000 Speaker 4: Coding is time consuming, but this technology allows you to 269 00:12:50,240 --> 00:12:53,840 Speaker 4: code with greater productivity and efficiency. So one great coder 270 00:12:53,920 --> 00:12:57,960 Speaker 4: now with a tool such as cognition labs Denim Devin 271 00:12:58,000 --> 00:13:02,680 Speaker 4: for example, you know, really creates massive coding capacity for 272 00:13:02,760 --> 00:13:06,000 Speaker 4: one coder as opposed to you know, having ten twenty 273 00:13:06,000 --> 00:13:09,320 Speaker 4: people sit around for a few days. So big productivity there. 274 00:13:09,400 --> 00:13:12,720 Speaker 4: And then, of course, when you think about operational systems 275 00:13:12,720 --> 00:13:16,640 Speaker 4: in any business, the ability to accelerate automation and therefore 276 00:13:16,720 --> 00:13:20,120 Speaker 4: drive more productivity, it's not just a cost exercise. It's 277 00:13:20,160 --> 00:13:24,240 Speaker 4: actually about taking that productivity and having more capacity to 278 00:13:24,320 --> 00:13:28,040 Speaker 4: reinvest in growth in your business. We'll spend you know, 279 00:13:28,120 --> 00:13:30,520 Speaker 4: six million dollars on technology this year. I would have 280 00:13:30,559 --> 00:13:33,640 Speaker 4: liked to spend eight, but I can't afford it because 281 00:13:33,640 --> 00:13:36,520 Speaker 4: I've got to deliver returns. But with this technology, my 282 00:13:36,600 --> 00:13:39,320 Speaker 4: ability to spend more and invest more in growth and 283 00:13:39,400 --> 00:13:44,440 Speaker 4: accelerate things that can grow our enterprise, it's more available. 284 00:13:44,000 --> 00:13:47,800 Speaker 1: To us five ten years time. Fewer jobs in banking 285 00:13:47,840 --> 00:13:48,800 Speaker 1: as a result of ailing. 286 00:13:49,880 --> 00:13:52,000 Speaker 5: I don't think that's the right lens. 287 00:13:52,240 --> 00:13:55,000 Speaker 4: I think there are places where the number of jobs, 288 00:13:55,040 --> 00:13:56,559 Speaker 4: the actual jobs will come down. 289 00:13:57,160 --> 00:13:59,640 Speaker 5: But the way the lens. I look at it is. 290 00:14:00,440 --> 00:14:02,600 Speaker 4: You know, I think we can continue to grow Goldman Sachs, 291 00:14:02,640 --> 00:14:05,280 Speaker 4: I think we can continue to serve a wider slice 292 00:14:05,320 --> 00:14:08,319 Speaker 4: of clients with these tools and these capabilities being integrated 293 00:14:08,320 --> 00:14:12,040 Speaker 4: into the firm, changing our processes the question, you know, 294 00:14:12,120 --> 00:14:13,720 Speaker 4: the way I would answer the question. If the firm 295 00:14:13,760 --> 00:14:16,199 Speaker 4: was the same size and it didn't grow, we would 296 00:14:16,200 --> 00:14:19,200 Speaker 4: certainly be operating with fewer people. But if the firm 297 00:14:19,240 --> 00:14:21,200 Speaker 4: grows and you expand and you can invest in other 298 00:14:21,240 --> 00:14:24,200 Speaker 4: areas for growth, we'll wind up with more jobs ten 299 00:14:24,280 --> 00:14:26,560 Speaker 4: years from now than we have today, just as by 300 00:14:26,600 --> 00:14:29,320 Speaker 4: the way we have in every step along the journey 301 00:14:29,320 --> 00:14:32,280 Speaker 4: for the last forty years, as technology has made us 302 00:14:32,320 --> 00:14:34,760 Speaker 4: more productive, I don't think it's different this time. 303 00:14:34,880 --> 00:14:37,480 Speaker 1: So you thought, just be clear. You foresee more headcount 304 00:14:37,480 --> 00:14:38,360 Speaker 1: at five ten times. 305 00:14:38,400 --> 00:14:39,600 Speaker 5: That's because I think we're going to be running a 306 00:14:39,640 --> 00:14:40,440 Speaker 5: much bigger enterprise. 307 00:14:40,480 --> 00:14:44,200 Speaker 3: Gay, do you worry about that there'd been something There's 308 00:14:44,200 --> 00:14:45,680 Speaker 3: been some hand ringing in terms of the investment we' 309 00:14:45,680 --> 00:14:47,720 Speaker 3: seen the hyperscoale. There's three hundred and fifty billion dollars 310 00:14:47,760 --> 00:14:51,080 Speaker 3: in terms of capex and data centres and infrastructure, and 311 00:14:51,120 --> 00:14:54,200 Speaker 3: the concern that the returnal investment isn't being matched, that's 312 00:14:54,240 --> 00:14:57,000 Speaker 3: not matching the revenue on the other side. Does that 313 00:14:57,040 --> 00:14:58,640 Speaker 3: concern you, that mismatch or sure it. 314 00:14:59,280 --> 00:15:02,040 Speaker 4: You know it serve it concerns anybody that's deploying capital. 315 00:15:02,080 --> 00:15:04,320 Speaker 4: But I think I think the journey is pretty clear, 316 00:15:04,360 --> 00:15:06,400 Speaker 4: even though you know, we're at the beginning of the movie, 317 00:15:06,480 --> 00:15:08,520 Speaker 4: at the end of the movie, I guarantee you at 318 00:15:08,560 --> 00:15:09,960 Speaker 4: the end of the movie, there'll be a bunch of 319 00:15:09,960 --> 00:15:11,960 Speaker 4: winners and there'll be a bunch of losers. 320 00:15:12,160 --> 00:15:13,640 Speaker 5: There'll be a bunch of capital that was. 321 00:15:13,600 --> 00:15:17,360 Speaker 4: Deployed that ultimately delivered very attractive returns, and there'll be 322 00:15:17,400 --> 00:15:19,160 Speaker 4: a lot of capital that was deployed that did not 323 00:15:19,240 --> 00:15:22,120 Speaker 4: deliver returns. And you can go back in any super 324 00:15:22,160 --> 00:15:25,800 Speaker 4: tech cycle or any big investment cycle, and that is 325 00:15:25,800 --> 00:15:28,760 Speaker 4: the pattern you'll see. It's not again, it's not different 326 00:15:28,800 --> 00:15:31,760 Speaker 4: this time. We just don't know how that will play out. 327 00:15:32,120 --> 00:15:35,920 Speaker 4: But it's very exciting to see these technologies get deployed 328 00:15:36,320 --> 00:15:39,880 Speaker 4: and the impact that's going to have. It just allows 329 00:15:39,960 --> 00:15:43,000 Speaker 4: productive people and productive businesses to be even more productive. 330 00:15:43,040 --> 00:15:45,040 Speaker 4: And so people get very caught in this question of 331 00:15:45,480 --> 00:15:48,239 Speaker 4: more or less. And you know, I prefer. 332 00:15:47,960 --> 00:15:50,040 Speaker 5: A lensis is. There are obviously things where we're gonna have. 333 00:15:50,040 --> 00:15:53,440 Speaker 4: A lot fewer people, but I'd love to have the 334 00:15:53,480 --> 00:15:56,000 Speaker 4: capacity to go get more people to spend time with clients. 335 00:15:56,240 --> 00:15:58,160 Speaker 4: I've loved to have the capacity to invest in new 336 00:15:58,200 --> 00:16:00,440 Speaker 4: businesses where I think we can affect clients, and we 337 00:16:00,520 --> 00:16:02,680 Speaker 4: need people to do those things. So it's it's a 338 00:16:02,720 --> 00:16:04,400 Speaker 4: give and take, and nobody stands still. 339 00:16:04,960 --> 00:16:07,160 Speaker 1: To be clear, you're not worried about an AI bubble. 340 00:16:08,320 --> 00:16:09,640 Speaker 5: You know an AI bubble. 341 00:16:11,320 --> 00:16:14,880 Speaker 4: I I think that there will be a lot of 342 00:16:14,920 --> 00:16:18,760 Speaker 4: capital that's deployed that will turn out to not deliver returns. 343 00:16:19,280 --> 00:16:23,640 Speaker 4: And when that happens, okay, people won't feel good. Okay 344 00:16:23,880 --> 00:16:26,440 Speaker 4: if if you know, I don't, I'm not gonna use 345 00:16:26,440 --> 00:16:27,600 Speaker 4: the word bubble because I don't know. 346 00:16:27,640 --> 00:16:28,920 Speaker 5: I don't know what the path will be. 347 00:16:29,320 --> 00:16:32,440 Speaker 4: But I do know people are out on the risk 348 00:16:32,480 --> 00:16:37,400 Speaker 4: curve because they're excited, and when they're excited, they tend 349 00:16:37,440 --> 00:16:39,920 Speaker 4: to think about the good things that can go right, 350 00:16:40,000 --> 00:16:43,240 Speaker 4: and they diminish the things you should be skeptical about 351 00:16:43,240 --> 00:16:45,320 Speaker 4: that can go wrong. We're in one of those environments 352 00:16:45,320 --> 00:16:47,640 Speaker 4: where people out on the risk curve and they'll be 353 00:16:47,720 --> 00:16:49,800 Speaker 4: a there'll be a reset, they'll be a they'll be 354 00:16:49,880 --> 00:16:50,960 Speaker 4: a there'll be a check. 355 00:16:51,000 --> 00:16:52,520 Speaker 5: At some point, there'll be a draw down. 356 00:16:54,160 --> 00:16:56,640 Speaker 4: The extent to that will depend on how long this goes. 357 00:16:57,000 --> 00:16:58,720 Speaker 4: By the way, if you were if we were having 358 00:16:58,760 --> 00:17:01,600 Speaker 4: this conversation in nineteen eighty eight, you would have been 359 00:17:01,640 --> 00:17:04,080 Speaker 4: asking the same nineteen ninety eight, you would have been. 360 00:17:03,960 --> 00:17:04,960 Speaker 5: Asking the same question. 361 00:17:05,680 --> 00:17:08,680 Speaker 4: Yet the environment went on for another three years until 362 00:17:08,680 --> 00:17:10,639 Speaker 4: there was not a significant check in two thousand and 363 00:17:10,680 --> 00:17:13,640 Speaker 4: one and two thousand and two. So I'm not smart 364 00:17:13,760 --> 00:17:15,159 Speaker 4: enough to know. I think it's going to go on 365 00:17:15,200 --> 00:17:17,040 Speaker 4: for a while. I think the opportunities are great. I 366 00:17:17,040 --> 00:17:21,960 Speaker 4: think they're very exciting, but I also see complacency. 367 00:17:21,280 --> 00:17:21,960 Speaker 5: Around risk take. 368 00:17:22,000 --> 00:17:24,399 Speaker 4: Even when that happens, ultimately there'll be some speed bumpser 369 00:17:24,480 --> 00:17:25,159 Speaker 4: some drawdowns. 370 00:17:25,680 --> 00:17:28,960 Speaker 3: David Solomon, chairman and CEO of Goldman Sachs, thank you 371 00:17:29,000 --> 00:17:29,400 Speaker 3: so much. 372 00:17:29,400 --> 00:17:29,760 Speaker 5: Thank you. 373 00:17:29,840 --> 00:17:30,359 Speaker 1: I'm texting. 374 00:17:31,240 --> 00:17:31,800 Speaker 5: Appreciate it. 375 00:17:31,800 --> 00:17:33,800 Speaker 1: Thank you, Davis, thank you, appreciate it. 376 00:17:37,760 --> 00:17:38,280 Speaker 5: See you looking. 377 00:17:39,520 --> 00:17:42,160 Speaker 2: What a wonderful conversation. Also with I have to say 378 00:17:42,320 --> 00:17:45,160 Speaker 2: a spitting sets not something that you see every day, 379 00:17:45,160 --> 00:17:48,120 Speaker 2: Tommy Kenzie. They're speaking with our golden well, the golden Sacks, 380 00:17:48,200 --> 00:17:51,240 Speaker 2: chief executive of Solomon at Time Tech Week. They talked 381 00:17:51,240 --> 00:17:53,880 Speaker 2: about the FED, they talked about tech and some of 382 00:17:53,880 --> 00:17:56,520 Speaker 2: of course, the things that we should be watching out for.