Goldman Sachs\u2019 CEO David Solomon says he believes there\u2019s enough \u201cgreed\u201d from investors to absorb the shock of some of the world\u2019s largest tech companies going public.<\/p>\n
In an interview with CNBC\u2019s Leslie Picker (1), Solomon was asked whether the markets could support the unprecedented wave of fundraising from AI firms as they prepare to launch their initial public offerings (IPOs).<\/p>\n
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According to reporting in Forbes, two factors are giving investors pause. First, AI infrastructure spending, such as on data centers that will take years to be approved and built, is skyrocketing. Secondly, that build-out is being financed with massive amounts of private credit. Economists warn that the U.S. economy might be becoming more fragile and unstable as a result, leaving it vulnerable to shocks (2). Since AI-heavy tech companies now make up a large portion (3) of the overall economy, this could pose a risk to the system as a whole. You may have heard it called the \u201cAI bubble<\/a>.\u201d<\/p>\n Solomon isn\u2019t concerned about an imminent burst. \u201cThere\u2019s plenty of liquidity in the system if the world continues to remain as optimistic,\u201d he told CNBC. \u201cWe are definitely in a moment where there\u2019s more greed than there is fear.\u201d<\/p>\n SpaceX, OpenAI and Anthropic look to list on the stock market <\/p>\n The comments come as some of the world\u2019s biggest AI companies are set to go public. Anthropic, the maker of Claude, has confidentially filed for U.S. initial public offering (4) (IPO). The company did not disclose the size of its offering, but last raised $65 billion (5), bringing its valuation to $965 billion. According to CNBC reporting, its annual revenue is, by contrast, about $47 billion. It\u2019s not yet profitable, but is getting close (6).<\/p>\n OpenAI, the maker of ChatGPT, was valued at $852 billion (7) at its last round of funding, and is reportedly expected to file in the coming weeks. And Elon Musk\u2019s SpaceX, which now includes his AI company xAI, the company behind the chatbot Grok, is expected to begin trading in mid-June with a reported valuation of $1.75 trillion, though the figure has been called into question.<\/p>\n And the three tech giants are not alone. Other firms are also looking for billions of dollars to fund AI data centers, chips and the vast infrastructure needed to support the technology.<\/p>\n Story Continues <\/p>\n Goldman Sachs is playing a crucial role in several of these deals, which helps put Solomon\u2019s confidence into context. Last month, the investment bank partnered with Anthropic (8) and other investment firms to create a new AI services company.<\/p>\n And while Solomon agrees the wave is unprecedented, he argues liquidity and record levels of wealth can support it \u2014 and that gains from AI will help fund taxes and new ventures.<\/p>\n The CEO did, however, acknowledge that this hunger on the part of investors could turn into something else.<\/p>\n Read More: Taxes are going to change under Trump\u2019s \u2018big beautiful bill\u2019 \u2014 4 reasons you can\u2019t afford to waste time<\/a><\/strong><\/p>\n Is this another dot-com bubble? <\/p>\n Greed can \u201cturn into fear very quickly, but that doesn\u2019t mean it will,\u201d Solomon told CNBC. \u201cExuberance can go on for big periods of time. … There\u2019s a good chance that we\u2019re earlier in the cycle than later.\u201d<\/p>\n While short-term excitement can push stock prices to unseen heights, it doesn\u2019t guarantee they\u2019ll stay high long-term. Take the dot-com bubble for example, when the tech-heavy Nasdaq index saw a five-fold increase between 1995 and 2000 (9). Tech startups capitalized on investor excitement about the newly minted World Wide Web, raising significant funds and going public. But when funds dried up, stocks collapsed. The Nasdaq fell by 75% in just two years.<\/p>\n However, today\u2019s AI leaders are different from dot-com startups in some ways. They generate substantial cash flow even as they pour billions into AI expansion.<\/p>\n As a reassuring sign, Solomon pointed to Alphabet\u2019s recent stock performance after announcing its plan for an $80 billion equity raise to fund AI compute infrastructure. Google\u2019s parent company has seen its stocks more than double the past year, thanks to positive reaction towards its AI investments.<\/p>\n \u201cThe stock is trading very well,\u201d Solomon told CNBC. \u201cThis is the first actual concrete data point for bringing something of this scale, and it\u2019s encouraging.\u201d<\/p>\n You May Also Like <\/p>\n Join 250,000+ readers and get Moneywise\u2019s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly. Subscribe now.<\/a><\/strong><\/p>\n Article Sources <\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines<\/a>.<\/p>\n CNBC (1<\/a>), (6<\/a>); Forbes (2<\/a>); The Motley Fool (3<\/a>); Anthropic (4<\/a>), (5<\/a>), (8<\/a>); OpenAI (7<\/a>); Corporate Finance Institute (9<\/a>)<\/p>\n This article originally appeared on Moneywise.com<\/a> under the title: Economy will be fine \u2018if the world continues to remain as optimistic,\u2019 Goldman Sachs CEO says as AI giants plan IPOs<\/a><\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"Goldman Sachs\u2019 CEO David Solomon says he believes there\u2019s enough \u201cgreed\u201d from investors to absorb the shock of…\n","protected":false},"author":2,"featured_media":519422,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[174],"tags":[4185,79,986,65216,179,18,20366,19,70265,17,224521,37501,66087,224522],"class_list":["post-519421","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-ai-company","tag-business","tag-data-centers","tag-david-solomon","tag-economy","tag-eire","tag-goldman-sachs","tag-ie","tag-initial-public-offerings","tag-ireland","tag-leslie-picker","tag-robert-kiyosaki","tag-tech-companies","tag-unprecedented-wave"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/116695471557432412","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/519421","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=519421"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/519421\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/519422"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=519421"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=519421"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=519421"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}