David Solomon can feel a change in the air.
While a sizable portion of the country remains in a deep freeze worthy of an Ice Age sequel, the CEO of Goldman Sachs (GS) can sense a mighty wind blowing through the economy.
"While no one has a crystal ball, there are a number of catalysts that we believe will continue to drive activity," Solomon said during the investment bank's fourth-quarter earnings call. "There has been a meaningful shift in CEO confidence, particularly following the results of the U.S. election."
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"Additionally, there is a significant backlog from sponsors and an overall increased appetite for dealmaking supported by an improving regulatory backdrop," he added. "The combination of these conditions should spur further activity in 2025."
Solomon is not the only one seeing that shift in chief executive confidence.
Almost 60% of CEOs around the world expect global economic growth to increase over the next 12 months, up from 38% last year and 18% two years ago, according to PwC’s 28th Annual Global CEO Survey, which was released at the World Economic Forum meeting in Davos, Switzerland.
PwC said 42 percent of companies expect to increase headcount over the next 12 months—more than twice the number expecting to decrease it.
Goldman CEO says people are optimistic
Donald Trump's return to the White House has been the source of much hope in the business community. Expectations of a looser regulatory environment resulting in a boost in M&A activity have been high.
Trump's victory, along with the Republican majorities in both houses of Congress, "is expected to bring a more business-friendly, deregulatory approach to policymaking, and further solidifies widespread expectations among market participants that M&A activity will increase in 2025," according to the Harvard Law School Forum on Corporate Governance.
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The forum noted that it remains to be seen whether the global environment will be hostile to M&A that crosses borders, given such factors as potential responses to tariffs and trade wars, geopolitical volatility, and so-called “tech lash," defined as a strong and widespread negative reaction to the far-reaching power and influence of large technology companies.
"Opportunity surely will exist, and many companies have been waiting for regulatory change prior to commencing in-industry M&A," the post said.
The biggest names in tech attended Trump's inauguration, including Meta Platforms' (META) CEO Mark Zuckerberg, Amazon (AMZN) founder Jeff Bezos, Alphabet (GOOGL) CEO Sundar Pichai, and Elon Musk, Tesla (TSLA) CEO and Trump's biggest donor.
"People are optimistic that we are going to run a more-growth prone agenda," Solomon told CNBC during an interview at the World Economic Forum in Davos, Switzerland. "We're going to free up some investment. We're going to unlock the private sector a little bit more, and that's got to be constructive and that is the best path for us."
Goldman Sachs is promoting a slate of star executives to run its biggest Wall Street business lines, spotlighting the firm’s next generation of leadership, Bloomberg reported.
The Wall Street giant is tapping new global leaders for its equities, fixed-income and banking units and also named new co-heads of the international unit and dramatically expanded the management committee.
Separately, a regulatory filing revealed the investment bank granted Solomon and John Waldron, his top deputy as the firm's president and COO, $80 million retention bonuses in restricted stock units that will vest by January 2030, contingent on his continuous service, Business Insider reported.
Investment banks start using GenAI
"The US economy is in pretty good shape as we head into this new administration," Solomon said. "I'm finding clients are really encouraged about it."
"People are focused on growth and if we can run a more growth-oriented agenda," he added, "if we can do some things that free up capital investment, especially private sector investment, that is a good path for us."
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He noted, "we are coming off of a very, very tough regulatory environment across all industries."
"There's no question that the private equity venture community has been on the sidelines for the last couple of years," Solomon said, adding that he expects to see "a meaningfully increased pace of deal activity in 2025."
Solomon said there was a sense of optimism around the growth of technology, particularly artificial intelligence.
"Of course, it's not going to be a straight line, he said, "but we're seeing the opportunities for that technology to improve productivity very, very meaningfully...I also think you're seeing real changes in technology that are advancing us economically in ways that I think have the potential to be quite positive."
The PwC survey found that CEOs were seeing tangible impacts from GenAI, with 56% reporting efficiency gains, while one-third saw profitability and revenue increases.
Meanwhile, Trump announced on Jan. 21 a joint venture investing up to $500 billion in infrastructure tied to artificial intelligence. The new partnership was formed by OpenAI, which created ChatGPT, IT company Oracle (ORCL) , and SoftBank, a Japanese investment holding company that invests in tech firms.
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Goldman Sachs is rolling out a generative AI assistant to its bankers, traders and asset managers. This is the first stage in the evolution of a program that will eventually take on the traits of a seasoned Goldman employee, CNBC reported.
The bank has released a program called GS AI assistant to about 10,000 employees so far, with the goal that all the company’s knowledge workers will have it this year, according to Chief Information Officer Marco Argenti.
It will initially help with tasks including summarizing or proofreading emails or translating code from one language to another.
Goldman’s move means that along with JPMorgan Chase (JPM) and Morgan Stanley (MS) , the world’s top three investment banks have aggressively released generative AI tools to their workforce, a remarkable development since ChatGPT went viral about two years ago.
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