Goldman Sachs CEO David Solomon spoke at Italian Tech Week in Turin, Italy, on Friday, October 3, 2025. He predicted a market drawdown. His warning of a “drawdown with respect to equity markets” in the coming 12 to 24 months (i.e., between October 2026 and October 2027) is a professional prognosis based on previous market history after significant technological leaps fueled by the current frenzy and investment of capital in Artificial Intelligence (AI).

He likened it specifically to previous cycles of technology, like the Dotcom Bubble, where the market is prone to “run ahead of the potential” and a lot of the invested money “will prove not to deliver returns.” He was careful not to outright label it as a “bubble” but noted that investors are “out on the risk curve because they’re enthusiastic.”

Amazon founder Jeff Bezos was at the same event and echoed a similar cautionary sentiment, this time citing AI as being in an “industrial bubble,” which he distinguished from financial bubbles by saying that society overall is improved by the resulting infrastructure and innovation.

The observation that the early market reaction appeared to be healthy (Dow and S&P 500 futures continuing their upward momentum) is also consistent with reports, highlighting the ongoing strong bullish sentiment.

The mention of his comments on the U.S. economy booming into 2026 on account of government spending and artificial intelligence, European savings’ necessity for more effective channeling, and increased M&A activity is also consistent with the overall report of his comments at the event.

In total, it is a detailed summary of a genuine and real market event a serious public warning by the CEO of one of the world’s leading investment banks on the sustainability of the AI-driven market rally.

Two of the most significant predictions of the news report that can “happen”:

1. Short-Term Market Correction: A significant correction or drop in the stock market, led by the AI sector, due to overvaluation and money being pumped into projects that eventually do not produce returns.
2. Long-Term AI Success (The Reset): Following the drawdown (the “reset”), the true, revolutionary potential of AI will lead to long-term economic growth, and the actually resilient, profitable AI companies will be the ultimate long-term survivors.

Solomon’s point is that the AI revolution is real, but entry costs (the value of the stock market) are too high currently. The market needs to clean out the non-viable players before the actual winners will be reasonably valued.

While this warning is indicative of the danger, the best reaction is not panic but preparation and strategic thinking long-term. Solomon himself has stated that such corrections in the market are a cycle and that he “sleeps very well,” while affirming his excitement over the technology, citing Goldman Sachs’ own use of AI internally to boost programmer productivity by 20% as an implication that a measured response is attainable.

The major lesson to draw from the warning is to be wary, but not fearful, and to let it serve as a reminder to review your long-term investment plan.

Our suggestion is to Look for Opportunities.