Chapter 1: What insights does David Solomon share about the impact of AI on the economy?
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Megan Rapinoe here. This week on A Touch More, figure skating legend Tara Lipinski joins us to talk about the upcoming Winter Olympics, whether this will be the comeback year for U.S. women's figure skating, and what she learned about herself after appearing on the reality show The Traitors. Plus, we're talking about the NWSL's high-impact player rule, a.k.a.
the Rodman rule, and why the players' union is against it. Check out the latest episode of A Touch More wherever you get your podcasts and on YouTube. Today's number, $2.9 billion. That's how much US consumers spent on sushi from grocery stores in 2025. A 7% increase year over year. Ed, what did the sushi chef say to the bee? What? What's up, bee?
Listen to me.
Markets are bigger than us. What you have here is a structural change in the world distribution. Cash is trash. Stocks look pretty attractive. Something's going to break. Forget about it.
I have to go clean. We got fucking David Solomon. I mean, we've got David Solomon coming on.
Donned David Solomon.
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Chapter 2: How has Goldman Sachs adapted to changes in the financial landscape?
I am in Davos for the first time in 26 years. When I was your age, I got invited here because I was a player. My guess is you're getting invited in a couple of years. And then I kind of pretty much everything in my life went sideways, moved, divorced, My company went out of business. And what do you know? They didn't invite me back. And now and then all of a sudden I got an invite back.
And I thought, oh, my God, I can't wait to go back and be the triumphant MacArthur, like, hero returning to Davos. And I'm like, what am I doing here? I'm not raising money. I'm not running for office. I'm not selling anything. My life has changed so much since I was last here.
Yeah, what are you doing? Why am I here? What does your day look like? I'll get the full rundown on Monday's episode, but just a quick teaser. What does it look like?
Well, this is supposedly the biggest year in a while because everyone's showing up. Carney spoke today. Trump spoke today. I ran into Gavin Newsom or Governor Newsom. Everybody's here, quote unquote. And so it's supposed to be the most crowded it's ever been. What am I doing here? I met...
The guy who runs BlackRock at another Master of the Universe conference, and he said, I'd really love to host you at Davos. And he's the new chairman. And I got all excited and I said, great. And they put me on some panels. But mostly I'm just kind of walking around and trying to avoid eye contact for some young person who wants to pitch me on their AI startup.
Yeah, I'm not doing a whole hell of a lot. And I don't know if you can see this lovely hotel room, but this hotel room can be yours for about 200 euros for 51 weeks a year. And during this week, it's 2,200 euros a night.
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Chapter 3: What lessons can we learn from the economic environment of 2025?
So I'm excited to be here. Sounds like you're having a great time. So far, no. So far, no. But since I was last here, I've joined the faculty of NYU, lived in San Francisco, Miami, New York, and now London, had two boys, had four companies go out of business, had to get to exits.
The biggest movies in 1999 were The Sixth Sense, which is awesome, Phantom Menace and Toy Story 2, and the biggest movies now are Zootopia 2, Avatar Fire and Ice, and Lilo and Stitch, which I think pretty much cements the decline of Western civilization. And back then, we were all sort of optimistic. Clinton was president. It was sort of like, wow, I want more, and I can't wait for tomorrow.
Now we're just like, I hope it doesn't get any fucking worse. Things are different now, Ed. Things are different. So, yes, Ed, I'm in Davos. Where are you?
Still in New York. Still living it up. It was very good to see you when you were in New York just last week. We had a nice business meeting, set out our growth objectives for the year. 20% growth is the plan for Profit Tree Markets.
So please, if you're listening to this and you're thinking about sending it to a friend or someone you know, you got to do it because I need to hit those benchmarks if I'm going to get a raise. So just think about that every time you're listening. 20% growth for the year. That's what we need.
Yeah, send it to... If there's five of you, send it to one friend. Does that make sense? I guess so. Anyways... But yeah, it was good to see you. And yeah, I got nothing else. Should we get to our interview with the...
I'm in a shitty room in the middle of the Alps in this like tier two ski resort trying to fill this hole of emptiness that if I think if I come to Davos again, that somehow then I'll be enough, Ed. Then I will be enough. Tomorrow I'm hosting a fascinating panel on why are we so divided? Oh, my God. Okay. Meta. Next panel.
How many panels are you doing?
I'm doing three. That's a lot.
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Chapter 4: What are David Solomon's thoughts on the future of deficit spending?
This is how it works here. They have... They have global leaders who are like, you know, meetings in the back of shitty restaurants, redrawing the maps of the world. They have CEOs of companies figuring out a way to become trillionaires. And then they have what I would call a small gaggle of intellectual support dogs. And I'm one of those that's supposed to make this whole thing like interesting.
So I'm the intellectual, one of the intellectual support dogs. It's like me, Adam Grant, Jonathan Haidt, and like three other academics. Yeah, Simon Sinek, cool of the day. Yeah, yeah. We've got David, guys. David's here. David's here. Gotta cut you off.
Here is our conversation with David Solomon, chairman of the board of directors and chief executive officer of Goldman Sachs. David, thank you very much for joining us on Profity Markets. Where does this podcast find you?
Thank you for having me. The podcast finds me in Florida for the day and then on my way to Davos, where I believe Scott is for the next few days. And so I'll be there. I'll be there tomorrow morning and certainly should be an interesting week with everything going on in the world.
Absolutely. Soon to be partying it up with Scott. We want to bust right into this because we only have you for so much time. So I'm going to get right into our questions. I want to start with your reflections on the past year, 2025. Your company is coming off one of its strongest years in a long time. Stock rose around 50%, 58 billion in revenue, 17 billion in profit.
As you look back on 2025, what do you make of the year? What went right? What went wrong? What surprised you?
2025 was a pretty constructive environment for our business, and I actually think 2026 is going to be a pretty constructive environment for our business, too. There obviously in 2025, there was a speed bump, you know, in April with the launch of the the tariff of the trade policy, which slowed things down and certainly sapped investor confidence for a period of time.
But the macro setup is pretty good. We can certainly spend some time talking about the macro setup. For Goldman Sachs and Goldman Sachs' performance, we've been executing. We did our first investor day back at the beginning of 2020, where we laid out a plan to really grow the firm. to really invest in our core business, the global banking and markets.
We pointed to four areas that we thought we really could grow the firm, asset management, wealth management, transaction banking, digital consumer banking, and we pledged to run the firm over time more efficiently.
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Chapter 5: How does deglobalization affect global firms like Goldman Sachs?
And really, for the last five years, we've been executing on that, five, six years, we've been executing on that aggressively and making good progress. And you go back to the end of 2019 when we laid out that plan, the firm was about a $36 billion revenue firm. The market cap was about $70 billion. And as you highlight, we're a $60 billion revenue firm. We've grown our revenues kind of 60%, 65%.
We've grown our earnings by over 100%. We've really grown the franchise and scaled the franchise in 2025, really saw that all come together. We made some pivots or changes along the way, but we really have got the firm in a powerful position with $2 big businesses that are well positioned to win leaders in their space growing nicely.
And, you know, I feel quite optimistic about the prospects as we look ahead, but 2025 was a year where we, you could really see the progress very concretely from investments and decisions we've made over the last five, six, seven years.
I have here this article from Business Insider that was published in 2023. And the headline reads, RIP Goldman Sachs. And then there's a byline that says, when I started out at Goldman, it was the most feared firm on Wall Street. Those days are gone. I remember a few years ago, everyone was saying that Goldman Sachs was in trouble. And it is kind of remarkable what's happened in the past decade
one or two years there's been at least as an observer this incredible comeback from the company i'd love to just get your reflections on what happened in those two years for those who don't know like what were the concerns about goldman and then how did you guys come back from that how could you explain what's happened in the past couple of years
I don't think the firm was ever doing so terribly. The press and the media can be a powerful tool and a powerful amplifier of a small number of voices. But fundamentally, the firm was a private partnership for 130 years, and it went public in 1999. Because the capital markets were globalizing from 1999 through 2007, the firm was growing close to 20% on the top line.
And it really ran as a public company in that period exactly the same way that it operated as a private partnership for 130 years. The financial crisis changed everything. It created a new regulatory structure, a new operating structure, reset the firm and forced the firm to double its capital base. And the firm kind of came out of the financial crisis and really stuck to its knitting.
and chugged along through that decade, but really wasn't operating to grow. And if you look at that decade after the financial crisis, the firm's revenues were pretty steady around 34 billion. The earnings were pretty steady. The capital, the balance sheet were all pretty steady.
And so we entered the end of the decade saying we really had to make some difficult changes to really take this enterprise and grow the enterprise. And whenever you change a big enterprise, you know, there's going to be resistance. People hate change. And 2022 was kind of a tough period. You had the Russian invasion of Ukraine, big markdowns in asset prices. It was a slower year for the firm.
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Chapter 6: What are the potential risks facing the economy in the near future?
and that created a lot of noise in the media. The media gobbled it up, and it became very noisy. We stuck to our knitting. We kept our head down. We knew the changes and the investments we were making were right, and really over the last few years, you know, that's panned out correctly. Ultimately, performance and execution matter, but change and growth take time.
You can't do it instantaneously, and I would say that was, you know, kind of a bumpy, noisy period for the firm, but the firm's on really good forward footing at the moment.
you're in a bunch of different businesses, all related with different asset management, sales and trading, investment banking, et cetera. If you had to pick one business that you think is gonna outperform the others over the next five years, and you're the CEO of a public company, so let me make it more broadly of your sector. Which business do you think is going to outperform the others?
Realizing you don't have a crystal ball, but which business do you think is poised to show the greatest returns over the next five years? And is there a new business that you think you guys will be in that'll be big in five years?
Yeah, I don't think over the next five years that we'll fundamentally be in a big new business. We're going to continue to focus on our core business of investment banking and markets, where we're a clear leader.
You know, I think in investment banking, the undisputed leader, you know, in markets, you know, one of the clear leaders and the kind of the combination of those two businesses, global banking and markets, I wouldn't take anybody's mix. I prefer our mix to anybody else's mix.
I think one of the things that's been surprising, Scott, over the last five years is that business has grown much better than I think we or the market would have expected it to grow. I think the things we did where we outperformed and we took share during that period, but the overall business has had better growth for a very, very large, mature business than I think the market expected.
I think the world's set up where that can continue. I think the more interesting thing for us is what we're doing in asset and wealth management. And I think there's very, very strong secular growth in asset and wealth management, particularly around our positioning, which on the wealth side is for the ultra wealthy.
You know, obviously, as asset prices, you know, continue to appreciate, you think about the generational wealth transfer from the baby boom generation that's going to go on. to the younger generation, my kids' generation. There's some powerful dynamics there, and I just think we're very well positioned in that business. So we have a wealth business that grows nicely double digits.
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Chapter 7: How does David Solomon view the intersection of AI and human capital?
And on green line paper, I'd literally write the balance sheets and income statements down. I'd add them together. I mean, it would take me a week to 10 days to actually put two companies together and look at the combined financial results. And then in 1985, somebody put an IBM 286 desktop computer on my desk and gave me Lotus 1-2-3 software.
And something that took me 10 days could be done in two hours. And so the productivity game was massive. You obviously here have dynamics where some of the work that analysts have been doing will be automated from this. And we will use we may have less in the short run of those people.
But I think the opportunity is to have more people doing more productive things with clients that can't be done simply by the technology. And so, you know, there'll be the shifting dynamic. You know, if you look back at the firm 25 years ago when I joined and you looked at the productivity, when you look at people and revenues, the firm is much more productive today than it was 25 years ago.
I bet 10 years from now, it'll be much more productive than it is today. But people, relationships, connectivity. They're still hugely important in this. And the question is, how do we shift the way people work and therefore free up more capacity to touch more clients, build more relationships, broaden the footprint? It's not as black and white as people in, people out.
So I do think the pace of change is quick. I think you will see some constraining of some of the entry-level jobs in these professional services platforms. It'll be more amplified in certain businesses rather than others. But I don't think it's going to be as disruptive in terms of the need for really smart people to work collaboratively to serve clients as some of the narrative around it.
But we're very focused on it. We're giving our people the tools at an accelerated pace to We're reimagining processes very quickly. And the reason I'm excited about it is not because it takes people out. It frees up people to allow us to invest in other parts of the business that really do scale with people. You know, for example, ultra high net worth wealth really scales with people.
And so, you know, at the end of the day, we've been constrained in some of the places we can invest. We see enormous productivity opportunities and you move people around to different places. The firm today has 12,000, 13,000 engineers. If you go back 20 years ago, we had a fraction of that.
My guess is we're going to have more leverage for coding and engineering with fewer people, but that will free up capacity to invest in other areas where we still need people to scale some of the work that we need to do. So it's a very interesting time with change, but not as binary and linear as I think a lot of people are talking about it.
Well, let me ask a more pointed question. In 36 months, do you think Goldman will have the same, fewer or more employees?
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Chapter 8: What advice does David Solomon have for young professionals entering the workforce?
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