Chairman & CEO, Goldman Sachs Group Inc
Goldman Sachs CEO David Solomon Talks Middle East Conflict | Bloomberg Talks
Goldman Sachs CEO David Solomon has expressed concern about the widening conflict in the Middle East, even though it hasn't ...
About David Solomon
David Solomon, chairman and CEO of Goldman Sachs, has recently expressed optimism about artificial intelligence, stating he does not believe it will cause massive structural unemployment but acknowledged it will "interrupt jobs and dislocate." In a series of interviews, Solomon described the technology as a potential driver of a "productivity boom" and "economic growth," while also cautioning that its deployment will not follow a straight line and that government and business have a "responsibility to work on policy" if disruption becomes severely dislocating. He emphasized that human interaction remains a "superpower" and predicted that firms will shift young employees toward client-facing roles. On markets and the economy, Solomon said the U.S. is in a period where "there's more greed than there is fear," and pointed to robust equity markets and significant liquidity to absorb large capital raises, including those from AI-related companies. He argued that a "regulatory structure and market structure" has made it unattractive for companies to go public until they have a capital need. In Goldman Sachs' first quarter 2026 earnings call, he reported net revenues of $17.2 billion and earnings per share of $17.55, both the second highest in the firm's history. Speaking at the Wharton MBA graduation, Solomon encouraged graduates to "be open to change" and invest in relationships, and stated that "today is the best day in the history of the world to be in your shoes."
Transcript (35 segments)
✨ AI-enhanced transcript with speaker attribution
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Narrator0:00
Let's turn now to one of our top interviews this morning from Saudi Arabia's Future Investment Initiative Summit. Bloomberg has been speaking to CEO of Goldman Sachs David Solomon. Our Horizons Middle Eastern Africa anchor, Jama Brti, has been speaking to him. Here is the exclusive interview in full, starting with David Solomon's thoughts on Saudi Arabia as an investment destination.
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David Solomon0:21
We are excited to be opening up a new office in the financial district. And I would say we are committed to our presence here in Saudi Arabia. I was reflecting last night around the past eight years, seven or eight years that I've been coming to this event, and just watching the progress here. The progress has been meaningful, and we've participated in that progress. It's interesting to watch our clients here on the ground participate in that progress and be in a position to try to help them. But also, as you look at the international community, the international community is more interested in what's going on from an economic development perspective here, and we're delighted to be positioned to help our clients in this region.
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Jama Brti0:59
Yeah, and it feels like there is so much deal making, even IPOs last year. It was a great year in terms of activity across all these exchanges, which means also more and more banks are looking to get involved in the action. Are you finding it difficult to retain and attract talent given the increasing amount of competition?
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David Solomon1:19
We have a very, very deep bench of bankers around the globe, including here in the region. We have a number of bankers from the region that base out of London and sometimes move back to this region. We've been able to attract talent. We're Goldman Sachs. We've been able to attract talent here in this region and other places in the world. I do agree there's more competition here, but that's positive actually, the levels of activity you're picking up. And I feel very, very confident in our ability to have really extraordinary people on the ground here to serve our clients very well.
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Jama Brti1:48
One of the stories that our Bloomberg News team have been reporting on is the fact that the PIF have been refocusing some of their investment efforts domestically, which means that in terms of the relationship with asset managers in the region, there's been a lot more focus on or questions asked about what some of these asset managers are delivering on the ground within Saudi Arabia. How do you think that is going to shape up the asset management ambitions within the region?
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David Solomon2:16
It's a very, very natural progress. And we've been talking about what's going on here in the Kingdom, but the level of investment in diversifying the economy here in the Kingdom is significant. And of course, that's a significant focus of the PIF. For a firm like Goldman Sachs, where we're well positioned to serve as an investment banker, to serve as a trader, to serve as an asset and wealth manager, I think the firm is incredibly well positioned to help in this part of the world regardless of the trajectory. So we're excited about what's going on here and excited about the opportunities we'll have to help serve our clients here.
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Jama Brti2:49
Can I ask you what your level of concern is vis-a-vis the geopolitical situation in the region right now?
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David Solomon2:55
I'm concerned about the geopolitical situation in the region. It's not good for security, it's not good for safety, it's not good for economic growth. And I'm hopeful that leaders both in the region and around the world and important governments around the world will be able to find a path to settle it down as we move forward. But of course, anytime you have geopolitical uncertainty, that's not good for economic growth and prosperity. And one of the things I just, as I spend time with people here on the ground, people want to find a path to a secure, prosperous, economically vibrant Middle East.
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Jama Brti3:26
Has it impacted business trading in the region?
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David Solomon3:29
You know, it's interesting. People are obviously concerned and very, very focused, but it's not had a significant impact on activity up to this point on activity in this part of the region.
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Jama Brti3:40
Yeah. Well, let's just talk more broadly. Your earnings came out very strong, surpassing expectations. Obviously the stock has had a good run this year. You must be feeling good, but let me just ask you how you're feeling about the outlook in general.
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David Solomon3:52
I feel good about the outlook. I think if you took a tour around the world, the US economy is actually doing quite well. It's been very, very resilient. I'm a little bit more concerned about European growth and also the economic situation in China. But overall, the engine of the US has been quite powerful, and our business, while global, is quite correlated to US growth. I can give you a list of things to worry about, but generally I can tell you also a list of things that I'm quite optimistic about. The progress around technology and AI and the opportunities to increase productivity are real. Progress that we're seeing around healthcare and medical technology are extraordinary in the impact that they'll have. So there are a lot of reasons to be optimistic about the growth and trajectory of economies around the world.
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Jama Brti4:38
Yeah, but there's also fragility and things can go wrong. Well, I was going to pick up on that because it's been really difficult to sort of track the narrative around the US economy the last few months, because we've gone from hard landing to soft landing, now people are talking about no landing. I'm not going to ask you for a descriptor of the US economy, but what I will ask you is where are some areas of concern that you're seeing right now?
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David Solomon4:59
Well, the base case in the US is certainly at this point for a soft landing. That doesn't mean that at some point there can't be some sort of a slowdown in economic growth. But what I would say is the US economy is proving to be incredibly resilient. We do have an election in the US, and there'll be policy decisions that come out of that election. And so certainly those will have an impact on the trajectory in 2025 and 2026. With respect to European growth, European growth is more sluggish at the moment, and I'm concerned about the same thing that many people I know are talking to you about at this event: geopolitics, US-China relationship, the situation in Ukraine, the situation we just touched on in the Middle East. Also concerned broadly about inflation in the world, concerned about energy policy, which is obviously a significant issue. I'm concerned about immigration and migration, which is an issue in different parts of the world. So these are all issues that require leadership and policy direction, and I'm hopeful as we get past the election in the US and we continue to move forward, we'll see a clear direction of travel on some of these significant policy issues.
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Jama Brti6:03
Well, I mean, the other big development is obviously the Fed have started cutting interest rates. And I think you were asked about what your expectations were for the Fed the last time. You said a 30% chance of a 50 basis point cut. So we'll give you that they went for the 50. But what matters more, do you think, for financial markets: how quickly they go or where they end up eventually?
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David Solomon6:22
I think there's an awful lot of attention on short-term rates. I'd actually be focused over time on longer-term rates. And I continue to be concerned about the level of spending and deficits in the United States. I don't think that's a short-term crisis factor, but unless we have policy change and get our spending and our debt under control, ultimately that's going to have a bigger impact on long-term rates than I think people are anticipating today. With respect to the short end of the curve, I think it's going to be very data dependent, and that data will be driven in part by what kind of policy we see coming out of the election. And so I think it's important to watch carefully. It seems like the Fed has been relatively transparent that we'll get another interest rate cut before the end of the year, but after that I think it will be very data dependent on what kind of policy implementation, what happens to growth, are the inflation numbers actually improving further. Those are all things I think the Fed will be watching carefully.
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Jama Brti7:21
Can I just circle back to your first point on spending though? The 10-year Treasury is trading around 4.3%. Do you think that is adequately pricing in the fiscal premium in the years to come in the US?
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David Solomon7:32
The market's the market, and so it is absolutely pricing in the premium that the market perceives today. What I would just say is if you look at the trajectory of our spending and our debt and the interest burden that we have, I think over time, and over time is through the rest of the decade, etc., we'll have to bring new buyers into US Treasuries, and that will potentially have a risk of putting pressure on longer rates unless we want to finance the whole Treasury stack at the front end of the curve, which would be a very, very significant policy shift.
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Jama Brti8:00
I want to ask you a little bit more about your trading numbers because they came in very strong, stronger than expectations. And earlier on you had guided that fixed income trading was going to see declines, but overall for the quarter you ended up posting quite strong trading results mainly on the back of your equity trading business. Was this sort of a one-off because there was so much volatility in equities this quarter, or can we expect that momentum to continue?
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David Solomon8:24
Our equity franchise is performing very, very well. We have the leading equity franchise of the big banks. It's something we've invested in and built over a long period of time. I can't tell you quarter to quarter what the market environment will put up for that franchise, but we are positioned very well to serve our clients and have a leading share position in that business. When I commented about our trading revenues in early September at the very beginning of September at a conference in New York, the business was softer. It had been softer in August, particularly in fixed income. We had a very, very strong comp from the third quarter in 2023, and ultimately our fixed income business was softer year-over-year. But I did say when I made that comment that it would be very, very dependent on what happened in September, and we actually had a more robust September than we expected.
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Jama Brti9:13
Yeah, a lot of the volatility. Do you think you can continue to gain market share on the trading side?
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David Solomon9:18
We do believe there are opportunities for us to continue to take share, although we're operating in a leading share position, so those gains will not be as pronounced as they've been over the last five years. But we think we have a very, very powerful ecosystem in our global banking and markets franchise. Our One GS operating ethos is helping us serve our clients in a very forward and exceptional way. And if you are patient, you take a long-term view, you earn trust, you show up for your clients in good times and bad, over time you gain share in these businesses, and we're very focused on that.
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Jama Brti9:50
What does the outlook look like right now for deal making?
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David Solomon9:53
Look, deal making is improving. I talked on our earnings call about the fact that our M&A backlog had improved. I talked about some headwinds, particularly on the regulatory side. I think the regulatory environment has been a headwind to some deal making. Obviously with an election, we could see a change in that context. But there's no question the deal making environment is improving. And when you look at what's going on with technology and the investment that's necessary to power AI, I think that's a tailwind for deal making over a period of time too. A lot of change, a lot of opportunity, and when there's change, leaders are constantly looking to make sure that they're positioned strategically to have a leadership position as the world evolves.
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Jama Brti10:35
Well, I know you've also been making a big push into your alternatives business. Private credit is an area of focus. What is the opportunity that you see there, because it really feels like that has become the major focus of the market. Many, many different players are looking to get involved in that space.
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David Solomon10:49
We've been in the private credit business for over 30 years. We have $140 billion of private credit assets. We've been a leading private credit player since the 1990s. What I would say is there continues to be secular growth around the opportunity set for additional private credit formation, and we're very, very well positioned given the way the firm sits to be a very, very unique player in that. Obviously in our asset management business, we manage significant private credit assets, but we also have one of the leading syndication franchises. We have an ability to originate and distribute in addition to being an investor through the asset management business. That's a very unique combination. I think it positions our firm very well, and you will see, in my opinion, continued secular growth in private credit formation. I still think we're early in that cycle.
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Jama Brti11:37
What do you think lower interest rates do for the private credit landscape though, given so much of the debt is floating?
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David Solomon11:43
I think private credit is not immune to lower interest rates, but there are different ways that we can finance activity, and private credit is a very important part of that. People use private credit as a very, very broad term. Are we talking about insurance companies financing investment grade companies? Are we talking about investment grade financing? Are we talking about below investment grade corporate financing? Are we talking about direct lending to small and medium-sized enterprises? These are all different forms of private credit. And the reality of it is, regardless of what the interest rate environment is, people need to finance. So of course, in the short term, movements in interest rates have an impact on short-term activity, but we're talking about the engines of finance that drive capital structure in a whole variety of ways. This is not something that's cyclically tied to short-term interest rates.
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Jama Brti12:31
Can I just get an update on how you see the consumer finance business and the pathway ahead for Goldman?
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David Solomon12:37
We've been very clear over the last few years that we're narrowing our consumer focus, and we've taken active steps to do that. We continue to have a very, very powerful deposit platform under Marcus, but we continue to take steps to narrow our consumer activity. And we're focused on our two big businesses: global banking and markets, and asset and wealth management. And we feel good about the way we're positioned.
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Jama Brti12:56
Well, we've been speaking for I guess like 15 minutes and I still haven't brought up the big US election coming up next week. Let me just ask you this, because as a bank I'm sure you would have run scenario analyses on what will happen either way. What would you say is the biggest risk for your business for either outcome, a Harris win or a Trump win?
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David Solomon13:15
We're watching the election like everybody else. The good news is it's coming up next week. And my hope would be that shortly after election night, we have a clear direction of travel in terms of what the next administration will be. Goldman Sachs is set up and positioned to help and support either administration, either outcome, and to support our clients in either of those outcomes. So we're watching like everybody else. It's going to be a close election, and we'll see in the next couple of weeks what the direction of travel is.
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Jama Brti13:42
Do you think it might have a knock-on effect on regulation and some of the regulatory stances taken?
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David Solomon13:49
There's no question that the regulatory pendulum has swung pretty significantly over the last few years. My hope would be in either administration, there'll be a fresh look at how we can ensure regulation is important to keep guardrails in the economy and to keep our economy moving in an appropriate way. But at the same point, that pendulum can swing too far and then it can become a headwind to growth. And I'm hopeful, on both sides of the aisle, there'll be a fresh look after the election to make sure we get that balance correct.
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Narrator14:16
So that was the CEO of Goldman Sachs, David Solomon, speaking to Bloomberg's Jama Brti at the Future Investment Initiative Summit in Saudi Arabia.