Goldman's Solomon On AI Financing Limits: 'I Don't Know, And Nobody Knows'
The CEO said demand for compute outstrips supply, but would not call whether capital becomes the bottleneck for the data center buildout.
Asked on Goldman Sachs' third-quarter earnings call whether financing will be the choke point for AI spending, Chairman and CEO David Solomon answered: "I don't know, and nobody knows." He also said client demand for computing power significantly exceeds supply right now.
What Solomon said about financing
The question came from a Bank of America analyst, who cited remarks overnight from Broadcom's Hock Tan questioning whether AI capital spending can be sustainably financed. Solomon said he expected to disappoint with his answer.
He said the financing needed for the U.S. data infrastructure buildout is "quite significant," and that as needs grow there may be pressure on rates that affects the returns and viability of certain projects. Not every project will be received well, he said.
He added that "there will be a point in time when this recalibrates, resets, for sure," with some bumps, but that it is very hard to predict when. More will be built, he said, and more financing will be necessary.
In prepared remarks, Solomon cited recent studies estimating the U.S. data center buildout could require north of $10 trillion through 2032, averaging roughly 3.6% of U.S. GDP annually. He said Goldman is "highly selective about the risk we underwrite and the capital we commit," particularly as client financing needs become larger and more complex.
Risks he named, and the cash-flow counterpoint
Responding to a Wells Fargo analyst, Solomon said the tech super cycle is "real and it's significant and it's not going away." He listed what could slow it: higher rates and rate volatility, geopolitical volatility, and local political volatility around data centers, with an election coming up.
Chief Financial Officer Denis Coleman, answering a Wolfe Research analyst, said this cycle differs from earlier ones because the largest companies driving it have significant capacity to use free cash flow to finance it. He said Goldman advises those companies on how much debt and equity to issue, and can also underwrite, distribute or hold certain financings on its own balance sheet.
Solomon said financing rates depend on the customer, noting a big difference between projects serving a hyperscaler and some of the neoclouds.
Solomon said he is not overly worried about rates for now, but that more interest rate volatility could create headwinds for activity.
Sources
- Goldman Sachs Earnings Top Estimates as Equities Revenue Surges 72% — benzinga.com
- Goldman Sachs quarterly profit rises — Bloomberg
- Goldman Sachs Q3 2026 earnings beat Wall Street estimates — qz.com
- Goldman Sachs Crushes Q3 Estimates, but the Stock Still Trades Below Its Own Buyback Price — Yahoo Finance
- Bank earnings October 2026: Live updates — CNBC
