Goldman Sachs CEO David Solomon is using AI to "invest in more people"

As investment banks look to implement AI, it seems a foregone conclusion that back office headcount will be adversely effected, but what of the revenue generators? Sentiment seems mixed but, speaking on a podcast last week, Goldman Sachs CEO David Solomon suggested AI will increase hiring for bankers.

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On Sequoia Capital's Long Strange Trip podcast, Solomon said that recent AI advancements "actually free up the capacity to invest more in people for our businesses that scale with people." He said that the pressure for consistent yearly returns have made the bank "somewhat limited" in that regard; while Solomon didn't mention a specific team, the implication is that teams working on deals that take years to come to fruition (i.e. advisory) will benefit the most.

He didn't mention any team at Goldman as being susceptible to headcount cuts, either, but mentioned that "all companies have massive accounting and financial reporting functions," and the people required for those teams may soon change.

Solomon's approach appears similar to the consensus. A Bloomberg survey of senior financial services professionals earlier this month found that the majority expected headcount of their teams to increase in the next three years thanks to AI. 

JPMorgan's plan with AI is to cut the size of future analyst classes, and shift half of them to low-cost locations like India; it seems more pessimistic than Solomon's view, but the two approaches aren't mutually exclusive. Solomon said in the podcast that experience is "a big differentiator" for Goldman, and that he prefers experienced people who are "smart enough" over high-potential people lacking in experience.

Solomon also said that roughly 50% of Goldman staff are in their 20s and maintains that the bank has an "apprenticeship culture." That ratio may change as AI evolves.

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