AI Exchanges: Will falling costs drive new opportunities?

Goldman Sachs Exchanges

Goldman Sachs

Business

4.4 • 1K Ratings

🗓️ 4 February 2025

⏱️ 22 minutes

🔗️ Recording | iTunes | RSS

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Summary

The introduction of low-cost AI models is raising questions about AI infrastructure and the high spending on AI by the world’s largest technology companies. In this inaugural episode of a special podcast series, AI Exchanges, Co-Hosts Allison Nathan and George Lee discuss the issues surrounding the costs of AI development and implementation, and the impact on deal-making, with Kim Posnett, global co-head of Investment Banking in Goldman Sachs’ Global Banking & Markets business. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Welcome to Goldman Sachs Exchanges. I'm Allison Nathan. This year we've decided to look closer at the rise of AI and everything it could mean for companies, investors, and economies. So we're bringing you this series of special podcast episodes we're calling AI exchanges, which I'll be hosting alongside my colleague, George Lee.
0:19.2	George is the co-head of the Goldman Sachs Global Institute.
0:21.8	He's the former CIO of Goldman Sachs.
0:24.2	And before that, he was co-chairman of the global technology, media, and telecommunications
0:28.5	group in our investment banking business.
0:30.6	George, thanks for joining me for this series.
0:32.7	Oh, thank you.
0:33.3	Allison's great to be doing this with you.
0:35.2	Look forward to it.
0:36.3	I am super excited about this.
0:38.0	The goal here is to help listeners understand the impacts that AI is having today and the ways
0:43.5	it could change in the years ahead, the implications, as I just said, for businesses and economies.
0:49.6	And George, there's really no better time to be having this conversation because, of course,
0:54.2	we've recently seen some really fundamental questions about the AI buildout ripple throughout
1:00.0	the markets quite powerfully.
1:01.4	We all have observed the volatility we've seen in the markets this week.
1:05.2	It's been well reported that a China-based AI company called Deepseek has rolled out a low-cost AI tool, which is
1:13.0	raising questions about AI infrastructure and about the massive spending on AI by America's
1:20.3	biggest tech companies. George, this is right up your alley. You've been having a pretty active
1:25.2	debate with Jim Covello, Global Head of Equity Research at Goldman Sachs, about whether the benefits of AI will justify what was expected to be an enormous cost from these companies in terms of developing and supporting the technology.
1:39.2	And that spending is well underway, as we all know.
1:42.2	And you've been on the bullish side of that debate. How does the
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