Goldman Sachs Group Inc. CEO David Solomon warned that artificial intelligence could disrupt employment faster than the economy creates new jobs, potentially requiring governments to step in to cushion the impact. He remains optimistic that the technology will ultimately boost productivity, spur new businesses and create employment opportunities.
“If the pace of this change is happening quickly, the bridge between the benefits and the jobs that are created and jobs that are being automated, could be quicker,” Solomon said in an episode of Goldman Sachs' Exchanges podcast. “We might need some policy actions to soften that disruption.”
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Solomon said the debate over AI should account for both the jobs it could displace and the new opportunities it could create. He expects significant changes to the workplace, but believes the pace of adoption will be critical in determining how workers and businesses adjust.
Jobs And AI
“I'm more in the second camp than the first camp with some caveats,” Solomon said, referring to business leaders who expect AI to drive economic progress rather than trigger a jobs crisis.
The US economy creates and eliminates about 30 million jobs a year on average, with job creation typically exceeding job losses by about 1 million, Solomon said. He pointed to small businesses as an important source of new employment and said AI could help them expand by lowering the cost of building and running a business.
He cautioned against assuming that higher productivity would automatically eliminate jobs. In knowledge-based roles, employees could use AI to complete more work and focus on tasks that require their expertise.
“Just because the technology makes them more productive, it doesn't mean the job goes away,” Solomon said. “It means that the smart people can do more productive things while getting the benefit of the technology in their workflows.”
He cited the changing role of analysts at Goldman Sachs as an example. The firm has not necessarily needed fewer analysts as technology has advanced, he said, but their work has changed and their productivity has increased.
Solomon advised workers concerned about AI to learn how to use the technology and adapt as their roles evolve.
“The most successful people adapt,” he said.
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Goldman's AI Push
At Goldman Sachs, AI adoption is focused on automating processes and improving the client experience, Solomon said. The firm is also looking at how efficiency gains could free up resources for investment and business growth.
AI tools could allow employees who work directly with clients to serve more customers, he said. The greater challenge is redesigning operating processes to achieve lasting efficiency gains and deciding how to use the additional capacity.
Solomon argued that AI development should not require a choice between innovation and safety. Governments should establish rules, developers should take responsibility for the models they build, and companies should be accountable for how they deploy the technology.
He said financial services offered useful lessons in risk management, testing and auditing. Businesses adopting AI need controls that allow them to manage its impact rather than treat the technology as a system for whose actions nobody is responsible.
AI Market Outlook
Solomon said he was not concerned about AI's long-term sustainability, despite market volatility as investors reassess spending plans and the returns on AI investments.
He expects the technology to be used across businesses, enterprises and governments over the coming decades, but said it would take 10 to 30 years to understand its full impact.
Demand for computing power currently exceeds supply, Solomon said, although the eventual scale of investment in infrastructure remains uncertain. He said it was difficult to know whether spending on the buildout would reach $5 trillion, $10 trillion or more.
“It will be a journey. It won't be a straight line,” he said, describing a cycle that could include periods of acceleration and pullbacks.
Investors are still trying to determine how quickly AI demand will grow, how much infrastructure will be needed and how advances in chip technology could reduce the computing capacity required, Solomon said.
He remains confident that AI will deliver substantial benefits over the medium and long term, even as markets reassess the pace of investment and the economics of the technology.
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