WEBVTT - Goldman Sachs CEO David Solomon Talks Economy, Deals to Accelerate 0:00:02.520 --> 0:00:07.080 Bloomberg Audio Studios, Podcasts, radio News. 0:00:07.360 --> 0:00:10.840 We can cross over now to Turin, where, of course, 0:00:10.960 --> 0:00:15.400 are Tom McKenzie speaking to David Solomon the Interview of 0:00:15.480 --> 0:00:16.439 the Day here it. 0:00:16.360 --> 0:00:20.000 Is it's given the geopolitical strains given now as well 0:00:20.000 --> 0:00:24.320 the shutdown in the US. David, does the US economy 0:00:24.480 --> 0:00:27.440 weather the current political standoff in Washington and does that 0:00:27.480 --> 0:00:31.840 resilience that we've seen this year continue into twenty twenty six. 0:00:32.560 --> 0:00:34.640 Well, first, thank you for having me here. Delighted to 0:00:34.640 --> 0:00:39.120 be here. The US economy is in pretty good shape, 0:00:39.520 --> 0:00:43.559 and there are some very very strong tailwinds that have 0:00:43.640 --> 0:00:45.519 really had a profound effect. And there are also some 0:00:45.560 --> 0:00:48.840 things going on that are creating headwinds and are probably 0:00:48.960 --> 0:00:53.519 leading the economy to underperformance expectations this time. But I'm 0:00:53.560 --> 0:00:56.240 optimistic that we're probably going to see an acceleration as 0:00:56.240 --> 0:00:59.240 we continue to add into twenty twenty six. The big 0:00:59.280 --> 0:01:02.280 structural issue that's kept the US economy going so well 0:01:02.320 --> 0:01:04.959 as the US and by the way, other developed economies 0:01:04.959 --> 0:01:08.959 around the world are running very aggressive fiscal stimulus plays. 0:01:09.640 --> 0:01:13.839 Governments are spending enormously into economies in the developed world, 0:01:14.440 --> 0:01:16.679 and that keeps the economy going even when you have 0:01:16.760 --> 0:01:20.440 other headwinds. Second big macro phenomenon that's affecting the US 0:01:20.480 --> 0:01:23.600 economy is all of the AI infrastructure build, all the 0:01:23.640 --> 0:01:26.600 capital spending, all that's going into the ground to support 0:01:27.160 --> 0:01:30.840 the deployment, the development, the continued growth of AI infrastructure 0:01:30.840 --> 0:01:32.959 into the enterprise, and that's a big tail wind too. 0:01:34.040 --> 0:01:37.200 That's balanced on the other side by the implementation of 0:01:37.240 --> 0:01:39.720 the trade policies, which are still getting absorbed. 0:01:40.360 --> 0:01:42.000 I think we're seeing, you know, some of the. 0:01:42.000 --> 0:01:45.360 Effects from trade, but you know, there's still more to 0:01:45.400 --> 0:01:47.920 go in terms of really understanding how the trade policy 0:01:48.000 --> 0:01:51.360 is fully implemented and how it balances growth. And then 0:01:51.360 --> 0:01:54.080 obviously the world's a little bit more geopolitically fragile and 0:01:54.120 --> 0:01:55.560 that has an impact on growth and. 0:01:57.560 --> 0:01:58.680 You know, kind of confidence. 0:01:58.960 --> 0:02:01.120 But when you balance it all and you saw the 0:02:01.160 --> 0:02:04.640 third quarter reading was quite strong, but year over year 0:02:05.080 --> 0:02:08.000 from last December to this December, the overall growth trajectory 0:02:08.040 --> 0:02:09.880 it will probably be a little bit less than two percent, 0:02:10.320 --> 0:02:13.800 and so that's slightly below trend, but still in pretty 0:02:13.800 --> 0:02:14.760 good shape. 0:02:14.880 --> 0:02:16.640 And then the acceleration into twenty twenty seven. 0:02:17.240 --> 0:02:20.720 I think that as the trade policies are absorbed and 0:02:20.760 --> 0:02:23.720 you have the continued stimulus and the continued kind of 0:02:23.760 --> 0:02:26.920 tech spend, You've got a pretty good tailwind. You know, 0:02:26.960 --> 0:02:29.919 I hear as I talk to CEOs that would kind 0:02:29.919 --> 0:02:32.440 of have their finger on the pull. Certainly, the upper 0:02:32.520 --> 0:02:35.079 end of the economy is still spending quite strongly, a 0:02:35.120 --> 0:02:37.639 little bit more constraint on the downside on the you know, 0:02:37.720 --> 0:02:39.080 the lower part of the economy. 0:02:39.560 --> 0:02:40.880 But I think the things you have to watch. You 0:02:40.880 --> 0:02:41.639 have to watch labor. 0:02:41.720 --> 0:02:43.960 There's no question labor shorts is a little bit softer, 0:02:44.040 --> 0:02:46.880 and the FEDS watching labor carefully. And you know, I 0:02:46.880 --> 0:02:49.079 think you've also got to watch inflation and whether or 0:02:49.160 --> 0:02:51.880 not the impact of trade is just a one time 0:02:51.960 --> 0:02:55.639 price movement or there's something you know, more significantly comes 0:02:55.639 --> 0:02:56.720 through and it's too early to know. 0:02:56.960 --> 0:02:59.520 And you touched on labor, how would you character rise 0:03:00.120 --> 0:03:02.120 the health of the US job market right now? 0:03:02.320 --> 0:03:04.680 It's a little bit it's a little bit softer, And 0:03:04.760 --> 0:03:06.600 I think you can step back and you can understand 0:03:06.639 --> 0:03:08.799 why when you think about big enterprises and what's going 0:03:08.800 --> 0:03:12.560 on with technology, people are pausing hiring to really kind 0:03:12.600 --> 0:03:15.240 of evaluate how as they bring this technology into the 0:03:15.320 --> 0:03:20.640 enterprise they can automate, create efficiencies, reinvest and so you know, 0:03:20.680 --> 0:03:22.799 I think at the moment that slowed hiring and as 0:03:22.800 --> 0:03:24.480 a result, you know, the labor number is a little 0:03:24.480 --> 0:03:24.880 bit softer. 0:03:25.120 --> 0:03:27.360 The Federal Reserve interest rates for the first time this 0:03:27.520 --> 0:03:30.960 year in September last month. The markets are expecting another 0:03:31.040 --> 0:03:33.760 approximately four cuts between now and this time next year, 0:03:33.919 --> 0:03:36.960 another one percentage point of cuts, with inflation remaining above 0:03:37.000 --> 0:03:37.720 the target for the Fed. 0:03:37.880 --> 0:03:39.280 Does that seem reasonable to you? 0:03:39.920 --> 0:03:43.680 I think it's in the distribution of outcomes, you know. 0:03:43.720 --> 0:03:45.360 I think we'll have to watch. I know, there's a 0:03:45.360 --> 0:03:48.000 great parlor game of people kind of predicting what the 0:03:48.000 --> 0:03:51.080 world's going to look like six months, you know, twelve 0:03:51.120 --> 0:03:51.800 months out. 0:03:52.000 --> 0:03:53.520 If you think about what the world looked like. 0:03:53.480 --> 0:03:55.800 In April and where markets were in April and think 0:03:55.840 --> 0:03:57.840 about where they are today, you know. 0:03:57.760 --> 0:03:59.960 I'd just be cautious. I think that. 0:04:01.560 --> 0:04:05.680 I think that we've got competing forces between labor and 0:04:05.720 --> 0:04:08.960 inflation and how they balance, which is still a little 0:04:08.960 --> 0:04:11.200 bit uncertain. We'll have an impact on whether we get 0:04:11.400 --> 0:04:13.240 one more cut or we get, you know, two or 0:04:13.240 --> 0:04:14.040 three more cuts. 0:04:14.400 --> 0:04:17.920 Global stocks at record highs, US stocks at record hizs, 0:04:17.920 --> 0:04:19.239 the s and P five on. It is up about 0:04:19.240 --> 0:04:22.360 fifteen percent year today in Nvidia's market camp is around 0:04:22.400 --> 0:04:24.479 four and a half trillion dollars. That's more than the 0:04:24.600 --> 0:04:29.800 entire market camps of France, UK, Germany, Italy combined. Does 0:04:29.839 --> 0:04:32.880 the market rally? Does this bull market? Are you comfortable 0:04:32.880 --> 0:04:35.960 with this pool market? Given some of the concerns you flagged? 0:04:38.000 --> 0:04:39.240 Am I am I comfortable? 0:04:39.400 --> 0:04:39.840 You know? Yeah? 0:04:40.320 --> 0:04:42.920 Sleep, I sleep very well. I'm not I'm not going 0:04:42.960 --> 0:04:44.760 to bed every night and worried about what will happen next. 0:04:44.760 --> 0:04:49.799 But markets, market's running cycles, and whenever we've historically had 0:04:50.040 --> 0:04:54.760 a significant acceleration and a new technology that creates a 0:04:54.800 --> 0:04:57.680 lot of capital formation and therefore lots of interesting new 0:04:57.680 --> 0:05:01.440 companies around it, you generally see the market run ahead 0:05:01.440 --> 0:05:03.400 of the potential because they're going to be winners and losers. 0:05:03.400 --> 0:05:04.680 They're going to be winners and losers. 0:05:05.640 --> 0:05:07.440 If you go back and you think about the Internet, 0:05:08.200 --> 0:05:11.520 pick on Amazon. You know, Amazon was one of many 0:05:11.560 --> 0:05:14.440 companies that was prosecuting that kind of opportunity. Many of 0:05:14.440 --> 0:05:18.280 the companies went away. Amazon became an incredible company. You're 0:05:18.279 --> 0:05:20.760 going to see a similar phenomenon here. I wouldn't be 0:05:20.800 --> 0:05:23.719 surprised if in the next twelve to twenty four months 0:05:23.720 --> 0:05:26.159 we see a draw down with respect to you know, 0:05:26.200 --> 0:05:28.960 equity markets, but that shouldn't be surprising and given the 0:05:29.000 --> 0:05:32.200 run we've had. But generally speaking, I think what's super 0:05:32.240 --> 0:05:35.280 exciting is the technology is expanding. 0:05:35.440 --> 0:05:37.240 New companies are being formed. 0:05:37.480 --> 0:05:41.400 And the potential of this technology deployed into the enterprise 0:05:42.240 --> 0:05:44.560 can be very, very powerful, and so it's an exciting 0:05:44.600 --> 0:05:46.440 time and the market, you know, the market looks forward. 0:05:46.560 --> 0:05:48.600 What does that mean for deal making? You've seen a 0:05:48.600 --> 0:05:50.520 pickup in deal making, What is the scale of the 0:05:50.520 --> 0:05:52.200 pickup you expect to see and what are you seeing 0:05:52.200 --> 0:05:52.839 in Europe? 0:05:53.040 --> 0:05:59.120 The pickup and deal making broadly is meaningful, but it's 0:05:59.120 --> 0:06:00.880 particularly accel in the US. 0:06:01.000 --> 0:06:02.599 And what's driving the. 0:06:02.560 --> 0:06:06.200 Pickup and deal making is a changed regulatory environment. So 0:06:06.600 --> 0:06:10.560 if you were thinking strategically and you wanted to really 0:06:10.640 --> 0:06:13.760 expand your scale or your competitive position in almost any industry, 0:06:14.720 --> 0:06:17.120 for the last four years in the United States, the 0:06:17.160 --> 0:06:19.960 answer was no. From a regulatory perspective, it really wasn't. 0:06:20.000 --> 0:06:22.000 What's the question, what could the answer be? The answer 0:06:22.040 --> 0:06:25.200 is no, And I think CEOs at this point imagine 0:06:25.200 --> 0:06:30.200 they're an environment where you actually can get strategic transactions 0:06:30.240 --> 0:06:32.000 done to expand your competitive position. 0:06:32.120 --> 0:06:33.760 And so we obviously inside Gold and. 0:06:33.720 --> 0:06:36.440 Sachs, we have an early look at that activity in 0:06:36.480 --> 0:06:40.280 those dialogues, and I would say it's accelerated very significantly 0:06:40.279 --> 0:06:41.880 if you just look at the facts in terms of 0:06:41.920 --> 0:06:45.360 what's public. We've obviously had a very significant m ANDA quarter. 0:06:45.400 --> 0:06:47.039 We had a one trillion dollar m and A volume 0:06:47.120 --> 0:06:51.440 quarter this past quarter. And if you look at large 0:06:51.440 --> 0:06:53.800 cap m and A meaning m and A for companies 0:06:54.440 --> 0:06:56.880 that are ten million dollars are larger, it's up one 0:06:56.960 --> 0:06:59.960 hundred percent year over year. So there is real moment 0:07:00.400 --> 0:07:02.560 in the deal making environment. I think you're going to 0:07:02.640 --> 0:07:06.279 see an acceleration of that into twenty six for sure. 0:07:07.000 --> 0:07:10.280 And increasingly CEOs are testing what the bounds are of 0:07:10.320 --> 0:07:13.840 their ability to enhance their competitive position or improve their 0:07:13.880 --> 0:07:17.400 scale and their lead where they have a leading position 0:07:17.440 --> 0:07:19.840 in a variety of industries, and I think the regulatory 0:07:19.920 --> 0:07:21.520 environment is going to permit that at the moment. 0:07:21.680 --> 0:07:22.880 Okay, so it sounds like you're going to be very 0:07:22.880 --> 0:07:24.360 busy you in the team on deal making in twenty 0:07:24.400 --> 0:07:27.680 twenty six. What are your priorities David for Goldman and 0:07:27.680 --> 0:07:28.320 the franchise. 0:07:28.320 --> 0:07:29.760 Next year, well, we. 0:07:30.040 --> 0:07:33.440 Don't really think about it, you know, next year ach 0:07:33.520 --> 0:07:35.800 Our priorities always start with the way we face and 0:07:35.840 --> 0:07:38.640 serve our clients. But in twenty nineteen, twenty twenty, we 0:07:38.760 --> 0:07:40.760 late a strategic plan out for the firm and we've 0:07:40.800 --> 0:07:42.880 been executing against it for the last six or seven years. 0:07:42.880 --> 0:07:45.760 And as you highlighted earlier in the discussion, we've created 0:07:45.800 --> 0:07:48.120 a lot of value because we've grown the firm. At 0:07:48.160 --> 0:07:49.800 the end of the day, as a public company, we 0:07:49.920 --> 0:07:52.400 have to grow. We might be a big, mature public company, 0:07:52.600 --> 0:07:53.600 but we have to grow. 0:07:53.640 --> 0:07:55.320 We have to grow. We have to grow our earnings. 0:07:55.680 --> 0:07:57.320 And to do that, you know, you have to have 0:07:57.360 --> 0:07:59.480 a coaching plan where you're investing in different parts of 0:07:59.480 --> 0:08:02.760 the business. We have two big principal businesses, our investment 0:08:02.800 --> 0:08:05.160 banking and trading business. Who I think there's a little 0:08:05.160 --> 0:08:09.760 debate about our leadership position. It's an extraordinary business, very 0:08:09.800 --> 0:08:13.600 big business. We've been investing and adding more resources to 0:08:13.600 --> 0:08:16.600 that business over the last five six years. We've increased 0:08:16.600 --> 0:08:19.040 our market shares very meaningfully in that business. Our market 0:08:19.040 --> 0:08:21.120 shares are up about three hundred and fifty basis points 0:08:21.440 --> 0:08:23.880 over the last five years in that business, and then 0:08:23.920 --> 0:08:27.280 separately we have the fifth or sixth seventh, depending on 0:08:27.320 --> 0:08:30.000 how you look at it, largest active asset manager in 0:08:30.000 --> 0:08:32.680 the world. We manage about three point three three point 0:08:32.679 --> 0:08:36.120 four trillion dollars through our asset wealth management platform. That 0:08:36.160 --> 0:08:39.000 business is growing high single digits, is what we've put 0:08:39.040 --> 0:08:41.680 out publicly. It's actually been growing faster than that, and 0:08:41.720 --> 0:08:45.120 we continue to invest in a variety of aspects of 0:08:45.160 --> 0:08:47.280 that business where we see real growth. We can grow 0:08:47.480 --> 0:08:49.600 our wealth business, which is an ultra high net worth 0:08:49.679 --> 0:08:53.080 wealth business. We can continue to grow our alternatives platforms, 0:08:53.160 --> 0:08:57.120 private capital formation, and we have a very flexible solutions 0:08:57.160 --> 0:09:00.680 business where really for big institutional capital allocators, we have 0:09:00.720 --> 0:09:03.440 an ability to really create and customize what they need 0:09:03.440 --> 0:09:04.679 from an investment perspective. 0:09:05.000 --> 0:09:06.640 There's been a lot of discussion here at it Onian 0:09:06.679 --> 0:09:11.040 Tech Week about how to get globally significant generational businesses. 0:09:11.080 --> 0:09:13.160 Tech business is built out of Europe one hundred billion 0:09:13.200 --> 0:09:14.160 dollar plus. 0:09:14.520 --> 0:09:15.840 What is your prescription for that? 0:09:16.000 --> 0:09:19.440 I mean my prescription for that is savings in Europe 0:09:19.440 --> 0:09:22.160 and capital in Europe needs to come into the risk 0:09:22.240 --> 0:09:27.400 economy in Europe. You just don't have the scale and 0:09:27.480 --> 0:09:30.880 scope of the available savings here are getting deployed into 0:09:30.920 --> 0:09:33.760 the tech risk ecosystem at the pace that it should 0:09:34.080 --> 0:09:36.280 when you compare and you look to the way things 0:09:36.280 --> 0:09:38.120 are deployed in the United States, and in fact, one 0:09:38.160 --> 0:09:40.560 of the things that happens here is capital from here 0:09:41.080 --> 0:09:45.520 looks over there, and so there are enormously smart, talented people. Here, 0:09:45.559 --> 0:09:49.720 are lots of great ideas, capital formation, and a real 0:09:49.760 --> 0:09:50.839 focus on risk taking. 0:09:50.960 --> 0:09:51.679 Stuff's going to. 0:09:51.600 --> 0:09:53.959 Go right, Stuff's going to go wrong, but you've got 0:09:54.000 --> 0:09:57.360 to take risk, You've got to deploy capital. This really 0:09:57.559 --> 0:10:00.720 has to become a bigger center of capital deploy And also, 0:10:00.800 --> 0:10:04.400 the more we can get the European Union to be 0:10:04.480 --> 0:10:07.520 operating as an economic union and taking advantage of the 0:10:07.559 --> 0:10:10.640 four hundred plus million people that are here as opposed 0:10:10.679 --> 0:10:15.000 to the individual states, for lack of a better term, 0:10:15.360 --> 0:10:17.920 the more we can get the tech economy working that way, 0:10:18.400 --> 0:10:20.319 I think, the better chance we have of reaching your goal, 0:10:20.320 --> 0:10:22.120 which I think would be a very noble goal for 0:10:22.160 --> 0:10:24.320 the world. So I mean, the more the more innovation 0:10:24.360 --> 0:10:25.440 over here, the better for the world. 0:10:26.040 --> 0:10:27.600 So us to live on the line will be here. 0:10:27.720 --> 0:10:30.720 So your one message to the European Commission president would 0:10:30.720 --> 0:10:36.640 be centralizing or capital most certainly the urgency. 0:10:36.840 --> 0:10:40.240 I you know, I'm feeling more urgency when I'm over here. 0:10:40.280 --> 0:10:44.079 But still, you know, the regulatory process in Europe is slow. 0:10:44.920 --> 0:10:48.160 Capital markets Union for sure, you know, more encouragement of 0:10:48.240 --> 0:10:51.160 risk taking in capital markets, trying to bring it all together. 0:10:51.679 --> 0:10:54.800 Consolidation in the banking system instead of national champions in 0:10:54.840 --> 0:10:58.560 every market, consolidation and the exchange system instead of champions 0:10:58.559 --> 0:11:01.520 in every market. You know, those are all things that 0:11:01.600 --> 0:11:04.760 will make capital formation easier, risk capital formation better, and 0:11:04.800 --> 0:11:09.160 will allow the acceleration of great companies here in these markets. 0:11:09.320 --> 0:11:11.320 You have lennin to tech and into AI. 0:11:11.679 --> 0:11:14.040 Your team at tell them you have twelve thousand engineers 0:11:14.320 --> 0:11:17.120 across Goldman Sachs. You have an AI the Golden SACS 0:11:17.160 --> 0:11:20.320 AI assistant, you have an AI developer. What parts of 0:11:20.360 --> 0:11:22.520 the business, and you've talked about some of them, whether 0:11:22.559 --> 0:11:24.680 it's well for asset management or trading or the consumer. 0:11:24.880 --> 0:11:26.400 What parts of the business at Goldman are going to 0:11:26.400 --> 0:11:28.040 be most transformed by AI? 0:11:28.440 --> 0:11:31.600 Well, I think you know the business of work is 0:11:31.600 --> 0:11:33.400 getting transformed by AI broadly. 0:11:33.600 --> 0:11:37.960 And you know we are at our HeartWare professional services firm. 0:11:38.000 --> 0:11:39.800 If you think about Goldman Sachs and the value it 0:11:39.840 --> 0:11:43.440 brings to its clients, its value is deployed really among 0:11:43.880 --> 0:11:48.880 three different things. People, capital, technology, and so if you 0:11:48.920 --> 0:11:55.080 think about AI, you know, AI really allows smart, talented, driven, 0:11:55.160 --> 0:11:58.560 sophisticated people to be more productive, to touch more people 0:11:58.600 --> 0:12:02.040 that have better information. Is they're dismall better analysis. I mean, 0:12:02.080 --> 0:12:03.920 this is a journey we've been on. You know, this 0:12:04.000 --> 0:12:06.720 technology accelerates it. But when I started forty two years 0:12:06.720 --> 0:12:09.760 ago and I wanted to look at five different companies 0:12:09.800 --> 0:12:12.160 and think about how to compare the trading in five 0:12:12.160 --> 0:12:13.719 different companies, I had to go to the library, I 0:12:13.720 --> 0:12:14.079 had to go. 0:12:14.000 --> 0:12:14.760 To the microfiche. 0:12:14.760 --> 0:12:18.360 I'd spend hours really thinking about how to put that 0:12:18.400 --> 0:12:21.000 comparison together. Obviously, today you can do it in a 0:12:21.000 --> 0:12:24.160 fraction of a second speaking into your phone. So this 0:12:24.280 --> 0:12:29.000 journey and providing tools to super super productive people and 0:12:29.040 --> 0:12:32.280 giving them more capacity to serve their clients and to 0:12:32.320 --> 0:12:35.040 be more productive is obvious. And we've been working on 0:12:35.080 --> 0:12:37.840 all those tools as most enterprises have. I think the 0:12:37.880 --> 0:12:42.079 more interesting thing for enterprises broadly, and this isn't unique 0:12:42.120 --> 0:12:45.239 to gold and Sachs, because the world is underpinned by technology. 0:12:45.800 --> 0:12:50.000 Coding is time consuming, but this technology allows you to 0:12:50.240 --> 0:12:53.840 code with greater productivity and efficiency. So one great coder 0:12:53.920 --> 0:12:57.960 now with a tool such as cognition labs Denim Devin 0:12:58.000 --> 0:13:02.680 for example, you know, really creates massive coding capacity for 0:13:02.760 --> 0:13:06.000 one coder as opposed to you know, having ten twenty 0:13:06.000 --> 0:13:09.320 people sit around for a few days. So big productivity there. 0:13:09.400 --> 0:13:12.720 And then, of course, when you think about operational systems 0:13:12.720 --> 0:13:16.640 in any business, the ability to accelerate automation and therefore 0:13:16.720 --> 0:13:20.120 drive more productivity, it's not just a cost exercise. It's 0:13:20.160 --> 0:13:24.240 actually about taking that productivity and having more capacity to 0:13:24.320 --> 0:13:28.040 reinvest in growth in your business. We'll spend you know, 0:13:28.120 --> 0:13:30.520 six million dollars on technology this year. I would have 0:13:30.559 --> 0:13:33.640 liked to spend eight, but I can't afford it because 0:13:33.640 --> 0:13:36.520 I've got to deliver returns. But with this technology, my 0:13:36.600 --> 0:13:39.320 ability to spend more and invest more in growth and 0:13:39.400 --> 0:13:44.440 accelerate things that can grow our enterprise, it's more available. 0:13:44.000 --> 0:13:47.800 To us five ten years time. Fewer jobs in banking 0:13:47.840 --> 0:13:48.800 as a result of ailing. 0:13:49.880 --> 0:13:52.000 I don't think that's the right lens. 0:13:52.240 --> 0:13:55.000 I think there are places where the number of jobs, 0:13:55.040 --> 0:13:56.559 the actual jobs will come down. 0:13:57.160 --> 0:13:59.640 But the way the lens. I look at it is. 0:14:00.440 --> 0:14:02.600 You know, I think we can continue to grow Goldman Sachs, 0:14:02.640 --> 0:14:05.280 I think we can continue to serve a wider slice 0:14:05.320 --> 0:14:08.319 of clients with these tools and these capabilities being integrated 0:14:08.320 --> 0:14:12.040 into the firm, changing our processes the question, you know, 0:14:12.120 --> 0:14:13.720 the way I would answer the question. If the firm 0:14:13.760 --> 0:14:16.199 was the same size and it didn't grow, we would 0:14:16.200 --> 0:14:19.200 certainly be operating with fewer people. But if the firm 0:14:19.240 --> 0:14:21.200 grows and you expand and you can invest in other 0:14:21.240 --> 0:14:24.200 areas for growth, we'll wind up with more jobs ten 0:14:24.280 --> 0:14:26.560 years from now than we have today, just as by 0:14:26.600 --> 0:14:29.320 the way we have in every step along the journey 0:14:29.320 --> 0:14:32.280 for the last forty years, as technology has made us 0:14:32.320 --> 0:14:34.760 more productive, I don't think it's different this time. 0:14:34.880 --> 0:14:37.480 So you thought, just be clear. You foresee more headcount 0:14:37.480 --> 0:14:38.360 at five ten times. 0:14:38.400 --> 0:14:39.600 That's because I think we're going to be running a 0:14:39.640 --> 0:14:40.440 much bigger enterprise. 0:14:40.480 --> 0:14:44.200 Gay, do you worry about that there'd been something There's 0:14:44.200 --> 0:14:45.680 been some hand ringing in terms of the investment we' 0:14:45.680 --> 0:14:47.720 seen the hyperscoale. There's three hundred and fifty billion dollars 0:14:47.760 --> 0:14:51.080 in terms of capex and data centres and infrastructure, and 0:14:51.120 --> 0:14:54.200 the concern that the returnal investment isn't being matched, that's 0:14:54.240 --> 0:14:57.000 not matching the revenue on the other side. Does that 0:14:57.040 --> 0:14:58.640 concern you, that mismatch or sure it. 0:14:59.280 --> 0:15:02.040 You know it serve it concerns anybody that's deploying capital. 0:15:02.080 --> 0:15:04.320 But I think I think the journey is pretty clear, 0:15:04.360 --> 0:15:06.400 even though you know, we're at the beginning of the movie, 0:15:06.480 --> 0:15:08.520 at the end of the movie, I guarantee you at 0:15:08.560 --> 0:15:09.960 the end of the movie, there'll be a bunch of 0:15:09.960 --> 0:15:11.960 winners and there'll be a bunch of losers. 0:15:12.160 --> 0:15:13.640 There'll be a bunch of capital that was. 0:15:13.600 --> 0:15:17.360 Deployed that ultimately delivered very attractive returns, and there'll be 0:15:17.400 --> 0:15:19.160 a lot of capital that was deployed that did not 0:15:19.240 --> 0:15:22.120 deliver returns. And you can go back in any super 0:15:22.160 --> 0:15:25.800 tech cycle or any big investment cycle, and that is 0:15:25.800 --> 0:15:28.760 the pattern you'll see. It's not again, it's not different 0:15:28.800 --> 0:15:31.760 this time. We just don't know how that will play out. 0:15:32.120 --> 0:15:35.920 But it's very exciting to see these technologies get deployed 0:15:36.320 --> 0:15:39.880 and the impact that's going to have. It just allows 0:15:39.960 --> 0:15:43.000 productive people and productive businesses to be even more productive. 0:15:43.040 --> 0:15:45.040 And so people get very caught in this question of 0:15:45.480 --> 0:15:48.239 more or less. And you know, I prefer. 0:15:47.960 --> 0:15:50.040 A lensis is. There are obviously things where we're gonna have. 0:15:50.040 --> 0:15:53.440 A lot fewer people, but I'd love to have the 0:15:53.480 --> 0:15:56.000 capacity to go get more people to spend time with clients. 0:15:56.240 --> 0:15:58.160 I've loved to have the capacity to invest in new 0:15:58.200 --> 0:16:00.440 businesses where I think we can affect clients, and we 0:16:00.520 --> 0:16:02.680 need people to do those things. So it's it's a 0:16:02.720 --> 0:16:04.400 give and take, and nobody stands still. 0:16:04.960 --> 0:16:07.160 To be clear, you're not worried about an AI bubble. 0:16:08.320 --> 0:16:09.640 You know an AI bubble. 0:16:11.320 --> 0:16:14.880 I I think that there will be a lot of 0:16:14.920 --> 0:16:18.760 capital that's deployed that will turn out to not deliver returns. 0:16:19.280 --> 0:16:23.640 And when that happens, okay, people won't feel good. Okay 0:16:23.880 --> 0:16:26.440 if if you know, I don't, I'm not gonna use 0:16:26.440 --> 0:16:27.600 the word bubble because I don't know. 0:16:27.640 --> 0:16:28.920 I don't know what the path will be. 0:16:29.320 --> 0:16:32.440 But I do know people are out on the risk 0:16:32.480 --> 0:16:37.400 curve because they're excited, and when they're excited, they tend 0:16:37.440 --> 0:16:39.920 to think about the good things that can go right, 0:16:40.000 --> 0:16:43.240 and they diminish the things you should be skeptical about 0:16:43.240 --> 0:16:45.320 that can go wrong. We're in one of those environments 0:16:45.320 --> 0:16:47.640 where people out on the risk curve and they'll be 0:16:47.720 --> 0:16:49.800 a there'll be a reset, they'll be a they'll be 0:16:49.880 --> 0:16:50.960 a there'll be a check. 0:16:51.000 --> 0:16:52.520 At some point, there'll be a draw down. 0:16:54.160 --> 0:16:56.640 The extent to that will depend on how long this goes. 0:16:57.000 --> 0:16:58.720 By the way, if you were if we were having 0:16:58.760 --> 0:17:01.600 this conversation in nineteen eighty eight, you would have been 0:17:01.640 --> 0:17:04.080 asking the same nineteen ninety eight, you would have been. 0:17:03.960 --> 0:17:04.960 Asking the same question. 0:17:05.680 --> 0:17:08.680 Yet the environment went on for another three years until 0:17:08.680 --> 0:17:10.639 there was not a significant check in two thousand and 0:17:10.680 --> 0:17:13.640 one and two thousand and two. So I'm not smart 0:17:13.760 --> 0:17:15.159 enough to know. I think it's going to go on 0:17:15.200 --> 0:17:17.040 for a while. I think the opportunities are great. I 0:17:17.040 --> 0:17:21.960 think they're very exciting, but I also see complacency. 0:17:21.280 --> 0:17:21.960 Around risk take. 0:17:22.000 --> 0:17:24.399 Even when that happens, ultimately there'll be some speed bumpser 0:17:24.480 --> 0:17:25.159 some drawdowns. 0:17:25.680 --> 0:17:28.960 David Solomon, chairman and CEO of Goldman Sachs, thank you 0:17:29.000 --> 0:17:29.400 so much. 0:17:29.400 --> 0:17:29.760 Thank you. 0:17:29.840 --> 0:17:30.359 I'm texting. 0:17:31.240 --> 0:17:31.800 Appreciate it. 0:17:31.800 --> 0:17:33.800 Thank you, Davis, thank you, appreciate it. 0:17:37.760 --> 0:17:38.280 See you looking. 0:17:39.520 --> 0:17:42.160 What a wonderful conversation. Also with I have to say 0:17:42.320 --> 0:17:45.160 a spitting sets not something that you see every day, 0:17:45.160 --> 0:17:48.120 Tommy Kenzie. They're speaking with our golden well, the golden Sacks, 0:17:48.200 --> 0:17:51.240 chief executive of Solomon at Time Tech Week. They talked 0:17:51.240 --> 0:17:53.880 about the FED, they talked about tech and some of 0:17:53.880 --> 0:17:56.520 of course, the things that we should be watching out for.