Goldman Sachs CEO David Solomon: AI is a longterm secular trend, don't see it reversing

Core Viewpoint - The innovative economy is currently a focal point for markets, with expectations of potential market corrections in the next year or two due to historical patterns following technological accelerations [2][4]. Group 1: Market Dynamics - There is ongoing volatility in the markets, and while some froth may have been removed, remnants could still exist [3][4]. - The pace of technology adoption is anticipated to be slower than the market currently expects, leading to fluctuations in investment returns over the coming years [6][7]. - Concerns exist regarding the ability of companies to meet debt obligations tied to new technologies, particularly if the pace of adoption does not align with expectations [8][9]. Group 2: Private Credit and Financing - Private credit is a significant area of financing for data center buildouts, with recent scrutiny over the valuations and performance of private credit managers [18][19]. - Goldman Sachs operates across the spectrum of private credit, lending to below-investment-grade companies that generally perform well in a strong economy [22][24]. - The credit risks associated with financing data centers differ from those of other private credit ventures, as data centers are often backed by large, stable companies like Google and Amazon [24][25]. Group 3: Long-term Economic Outlook - The long-term economic benefits from AI and technology deployment are expected to be substantial, contributing to productivity gains and overall economic growth [12][13][16]. - While short-term volatility is acknowledged, the overarching trend towards technological advancement is viewed as a secular trend that will not reverse [12][14]. - The importance of disciplined risk management and underwriting processes in credit markets is emphasized, particularly in the context of potential economic downturns [26][27].