Goldman Sachs CEO Says AI Infrastructure Financing Demand Remains Strong Amid Market Selloff

Goldman Sachs Chief Executive David Solomon said demand for financing artificial intelligence infrastructure remains strong, even as investors reassess the returns from the industry's massive spending commitments and political opposition raises questions about the pace of new data center construction in the United States.

Solomon told CNBC on Monday that Goldman had been "very active" in AI-related capital markets transactions in recent weeks and expected financing activity to continue as companies expand computing capacity and develop the technology supporting AI applications.

"There's still very strong demand for investments in the AI infrastructure build and the technology around the growth of AI," Solomon told CNBC's Leslie Picker.

His comments offer a view from one of Wall Street's leading investment banks as the AI investment cycle comes under closer scrutiny. Technology companies, semiconductor manufacturers and specialized cloud providers have committed hundreds of billions of dollars to data centers, processors and supporting infrastructure. Investors are increasingly questioning whether the resulting revenue and productivity gains will justify the scale of expenditure.

Solomon acknowledged that changes in the political environment could create uncertainty for the sector, leading to adjustments in investment plans and periods of market volatility.

"Changes in the political environment are among factors that will create recalibrations and ups and downs, and we're seeing some of that," he said.

However, he maintained that the long-term economic potential of artificial intelligence remained substantial.

"But I still deeply believe in the long-term trajectory of the power of AI in our economy to drive productivity," Solomon added.

AI-related shares, including chipmakers and neocloud providers, have fallen in recent weeks as investors reconsider the economics of the infrastructure expansion.

The selloff began before the US midterm elections and intensified after Democrats recorded sweeping victories on Tuesday, raising concerns that stronger political opposition could slow approvals for data center projects or introduce additional restrictions on construction.

The market reassessment extends beyond the technology companies directly developing AI models. Investors are also examining businesses supplying computing capacity, semiconductors, electricity and other infrastructure required to support the expansion.

The backdrop has intensified concern about the industry's investment commitments generating returns at a sufficient scale and speed. Data centers require substantial upfront capital, while revenue depends on sustained demand for computing services and the ability of customers to translate AI adoption into commercial gains.

Political resistance adds another layer of uncertainty. Data center projects face concerns over electricity demand, water consumption, land use, and pressure on local power grids. Delays or restrictions could affect the timing and cost of infrastructure deployment, even if demand for computing capacity continues to rise.

Solomon pushed back against resistance to new data center construction, arguing that the infrastructure is necessary to support the US economy and that projects can be developed responsibly.

"We certainly don't want this infrastructure going to places outside the U.S., which is what will naturally happen because the demand for compute is there," he said.

His remarks frame data center investment as a matter of economic competitiveness, with the risk that restrictions on domestic construction could shift some infrastructure spending and computing capacity to other countries. That argument is likely to remain central to the debate over how the United States balances the economic benefits of AI investment against the local costs of building the infrastructure required to support it.

Anthropic IPO Faces a Test of Investor Appetite

The changing market sentiment comes as AI model developer Anthropic prepares for a potential initial public offering that could become one of the largest tests of public-market demand for AI companies.

Goldman Sachs is among the banks leading the IPO process. The offering would provide an important indication of how investors value AI businesses at a time when enthusiasm for the technology remains strong, but questions about capital requirements, profitability and long-term returns are becoming more prominent.

Solomon declined to discuss the potential listing in detail, including its timing and prospects.

"We'll see, obviously, if this IPO moves forward, how it all plays out," he said.

He nevertheless described the broader market environment as constructive.

"I would say that the market environment is still pretty constructive," Solomon added.

An Anthropic listing would attract attention because public investors would have to assess the economics of a business operating in a capital-intensive industry where the cost of developing and running advanced AI models is substantial. Its valuation and investor demand would offer a benchmark for other private AI companies considering public listings.

The offering would also test whether investors are prepared to distinguish between companies with established commercial demand and those whose valuations rely more heavily on expectations of future AI adoption.

For Goldman, continued financing activity suggests that market volatility has not brought the AI infrastructure funding cycle to a halt. However, strong demand for capital does not mean that the investments will generate adequate returns.