The big banks and financial giants have reported earnings and across the board they were strong due to increased M&A and trading volume. That said it’s worth noting some key comments about the AI infrastructure buildout. Here’s a look at what financial sector CEOs and CFOs are saying about the AI market.
Goldman Sachs CEO David Solomon said on the company’s fiscal third quarter call:
“There is no question that there is a fair amount of investor exuberance at the moment with U.S. equity markets consistently hitting record highs over the last several months. Much of this has been fueled by a tremendous amount of investment in AI infrastructure, which has driven significant capital formation. But as students of history, we know that following periods of broad-based excitement around new technologies, there will ultimately be a divergence where some ventures thrive and others falter. While I feel good about the forward outlook on balance, the market operates in cycles and disciplined risk management is imperative. We are especially vigilant in times like these to proactively manage risks.”
- Goldman Sachs eyes next AI transformation from position of strength
- Watercooler debate: Are we in an AI bubble?
- Enterprise AI: It's all about the proprietary data
JPMorgan Chase CFO Jeremy Barnum talked about his opinion on the AI boom and current market. He said: “The risk is because of how incredibly overwhelming the AI theme is for the whole marketplace right now and all the various effects that it's having in terms of equity market performance, MAG 7, data center build-out, electricity costs, like it's an overwhelming thing. And I think for us, running a company of this type, we need to make sure we stay anchored in like facts and reality and tangible outcomes. We’re putting a lot of energy into AI. A lot of people are spending a lot of time on it. We're spending a lot of money on it. We have very deep experts.”
Barnum continued:
“We've been doing it for a long time, well before the current generative AI boom. But in the end, the proof is going to be in the pudding in terms of actually slowing the growth of expenses. And so, what we're doing is kind of rather than saying you must prove that you're generating this much savings from AI, which turns out to be a very hard thing to do. It’s hard to prove and might at the margin result in people scrambling around to use AI in ways that are actually not efficient and that distract you from doing underlying process reengineering that you need to do. What we're saying instead is let's just do old-fashioned expense discipline.”
Citigroup CEO Jane Frasier had a similar theme on the bank’s third quarter earnings call. She said: “The macro environment reflects the global economy that's proved more resilient than many anticipated. The U.S. continues to be a pace setter, driven by consistent consumer spending as well as tech investments in AI and data centers. That said, there were pockets of valuation frothiness in the market. So, I hope discipline remains.”
The AI buildout is also a theme abroad, notably China. Frasier said:
“In Asia, China's domestic spending has slowed. However, the investments they are making in technology are staggering, and the world should take notice. India's fundamentals of the young tech-savvy labor force and robust domestic consumption continued to drive high growth there. But in Europe, structural challenges still need to be dealt with for the continent to escape this low growth cycle.”
