By Priya Raghuvanshi
Copyright timesnownews
David Solomon, CEO of Goldman Sachs, recently cautioned investors that the current surge in stock markets fueled by artificial intelligence (AI) innovation may soon face a significant pullback. Speaking at the Italian Tech Week in Turin, Solomon drew parallels between today’s AI-driven market excitement and the dotcom bubble of the early 2000s, suggesting a similar pattern of winners and losers could emerge over the next one to two years. “Markets run in cycles, and whenever we’ve historically had a significant acceleration in a new technology that creates a lot of capital formation, and therefore lots of interesting new companies around it, you generally see the market run ahead of the potential… there are going to be winners and losers,” Solomon explained, according to a Mint report. Drawdown Possible In Next 12 To 24 Months Solomon warned that within the coming 12 to 24 months, investors could see a market drawdown as some of the capital deployed into AI ventures fails to deliver expected returns. “I wouldn’t be surprised if in the next 12 to 24 months, we see a drawdown with respect to equity markets… I think that there will be a lot of capital that’s deployed that will turn out not to deliver returns, and when that happens, people won’t feel good,” he said, highlighting the natural risk cycle in booming markets, added the report. Despite the caution, Solomon refrained from labelling the current AI surge as a bubble, states the report. Instead, he pointed out, “I’m not going to use the word bubble, because I don’t know, I don’t know what the path will be, but I do know people are out on the risk curve because they’re excited.” Optimism for AI’s Long-Term Potential While Solomon highlighted risks, he remains optimistic about AI’s transformative power. “I sleep very well. I’m not going to bed every night worried about what will happen next. Generally speaking, I think what’s super exciting is that the technology is expanding, new companies are being formed, and the potential of this technology deployed into the enterprise can be very, very powerful. So, it’s an exciting time,” he added, as per the report. Get Latest News live on Times Now along with Breaking News and Top Headlines from Business, Companies and around the world.
