AI isn't taking banking jobs, Goldman Sachs CEO says
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AI isn't a job killer for bankers, Goldman Sachs CEO David Solomon says.
Why it matters: As concerns mount about the role of junior bankers in an AI-powered Wall Street of the future, Solomon tells Axios he is optimistic about the technology.
What they're saying: "There is no question that when you put these tools in the hands of smart people, it increases their productivity," Solomon said in an exclusive interview ahead of this week's 10,000 Small Businesses Summit in Washington. "You're going to see changes in the way analysts, associates and investment bankers work."
- "But if you're looking at it and assuming an organization like Goldman Sachs…is just going to have less people, I don't think it works that way," he says.
State of play: In a memo to employees, executives recently rolled out what they called the OneGS 3.0 initiative, which lays out AI priorities that will "change the way people work," according to Solomon.
- The memo reportedly included a line on constraining headcount growth, although Solomon tells Axios he expects headcount to continue to grow.
Zoom in: The technology may affect the labor force in a different way by raising the stakes of performance.
- "I think what this does is it gives us capacity to create more productivity, grow our business, therefore we need more high value people," Solomon says. "We can afford more high value people to expand our footprint and continue to grow and broaden our business."
- It mirrors what other executives working on the AI-ification of finance have told Axios. Anthropic chief revenue officer Kate Jensen said in July that the technology raises the bar for what she expects from her team.
By the numbers: Youth unemployment recently skyrocketed above 10%, more than twice as high as the national rate, highlighting worries that AI could gut entry-level work in many professions.
- Over the past decade, one in five S&P 500 companies have shrunk their workforces. This trend reflects not just the anticipated impact of AI but also a broader push toward running leaner organizations.
- Goldman's revenue per worker hit over $2.7 million in 2024. Solomon says he expects revenue to continue to grow more than number of employees.
Threat level: The conversation with the Goldman CEO comes after OpenAI hired more than 100 former investment bankers to create financial models that can do the work of junior finance employees, according to Bloomberg.
- Solomon says the idea that AI adoption means replacing workers is a "very simple media narrative," arguing it's not so simple.
- As technology comes into enterprises, "it makes productive people, which is what we have at Goldman Sachs, more productive."
What to watch: The AI-ification of Wall Street.
- JPMorgan has its own AI tool, BNY Mellon has digital employees, and every major bank is working to implement the technology.
The bottom line: On Wall Street, the new edge could be AI adoption.
