Copyright © BusinessAMBE 2023

Key takeaways

  • A market correction is likely in the next two years due to excessive investments in AI companies.
  • This correction could lead to lower valuations on the stock market, as some investments in AI are not profitable.
  • Despite a possible slowdown, David Solomon, CEO of Goldman Sachs, remains optimistic about the long-term transformative potential of AI.

David Solomon, CEO of Goldman Sachs, predicts a market correction in the next two years due to the current AI frenzy. He draws a parallel with the dot-com bubble of the late 1990s and early 2000s. Back then, rapid technological progress in the internet sector led to both huge gains and heavy losses for investors.

Correction on the horizon

Solomon believes that the massive influx of capital into AI-related companies will inevitably result in some investments not delivering the expected returns. According to him, this correction could occur in the next 12 to 24 months and lead to lower stock market valuations.

Although Solomon acknowledges the possibility of a slowdown, he remains optimistic about the long-term prospects for artificial intelligence. He sees it as a transformative technology with the potential to revolutionize industry and create new business opportunities.

Echoes of caution

Solomon’s cautious tone is shared by other financial leaders. Jeff Bezos, founder of Amazon, has called the current AI landscape an “industrial bubble.” Seasoned investor Leon Cooperman has also expressed concern about the risk of bubbles at the end of a bull market, echoing earlier warnings from Warren Buffett, chairman of the conglomerate Berkshire Hathaway.

Karim Moussalem, chief investment officer at Selwood Asset Management, points to the significant risks associated with AI trading. He compares the situation to historical speculative manias. Despite these warnings, Solomon remains positive about AI, highlighting its transformative potential and the exciting opportunities it offers for businesses.

Follow Business AM on Google News

Want access to all articles? Take advantage of our temporary promotion and subscribe here!

© The Content Exchange, source News