“Markets run in cycles, and whenever we’ve historically had a significant acceleration in a new technology that creates a lot of capital formation and therefore lots of interesting new companies around it, you generally see the market run ahead of the potential. Are there going to be winners and losers? There are going to be winners and losers.” – David Solomon – Goldman Sachs CEO
The quote, “Markets run in cycles, and whenever we’ve historically had a significant acceleration in a new technology that creates a lot of capital formation and therefore lots of interesting new companies around it, you generally see the market run ahead of the potential. Are there going to be winners and losers? There are going to be winners and losers,” comes from a public discussion with David Solomon, CEO of Goldman Sachs, during Italian Tech Week in October 2025. This statement was made in the context of a wide-ranging interview that addressed the state of the US and global economy, the impact of fiscal stimulus and technology infrastructure spending, and, critically, the current investment climate surrounding artificial intelligence (AI) and other emergent technologies.
Solomon’s comments were prompted by questions around the record-breaking rallies in US and global equity markets and specifically the extraordinary market capitalisations reached by leading tech firms. He highlighted the familiar historical pattern: periods of market exuberance often occur when new technologies spur rapid capital formation, leading to the emergence of numerous new companies around a transformative theme. Solomon drew parallels with the Dot-com boom to underscore the cyclical nature of markets and to remind investors that dramatic phases of growth inevitably produce both outsized winners and significant casualties.
His insight reflects a seasoned banker’s view, grounded in empirical observation: while technological waves can drive periods of remarkable wealth creation and productivity gains, they also tend to attract speculative excesses. Market valuations in these periods often disconnect from underlying fundamentals, setting the stage for later corrections. The resulting market shake-outs separate enduring companies from those that fail to deliver sustainable value.
About David Solomon
David M. Solomon is one of the most prominent figures in global finance, serving as the CEO and Chairman of Goldman Sachs since 2018. Raised in New York and a graduate of Hamilton College, Solomon has built his reputation over four decades in banking—rising through leadership positions at Irving Trust, Drexel Burnham, and Bear Stearns before joining Goldman Sachs in 1999 as a partner. He subsequently became global head of the Financing Group, then co-head of the Investment Banking Division, playing a central role in shaping the firm’s capital markets strategy.
Solomon is known for his advocacy of organisational modernisation and culture change at Goldman Sachs—prioritising employee well-being, increasing agility, and investing heavily in technology. He combines traditional deal-making acumen with an openness to digital transformation. Beyond banking, Solomon has a notable side-career as a DJ under the name DJ D-Sol, performing electronic dance music at high-profile venues.
Solomon’s career reflects both the conservatism and innovative ambition associated with modern Wall Street leadership: an ability to see risk cycles clearly, and a willingness to pivot business models to suit shifts in technological and regulatory environments. His net worth in 2025 is estimated between $85 million and $200 million, owing to decades of compensation, equity, and investment performance.
Theoretical Foundations: Cycles, Disruptive Innovation, and Market Dynamics
Solomon’s perspective draws implicitly on a lineage of economic theory and market analysis concerning cycles of innovation, capital formation, and asset bubbles. Leading theorists and their contributions include:
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Joseph Schumpeter: Schumpeter’s theory of creative destruction posited that economic progress is driven by cycles of innovation, where new technologies disrupt existing industries, create new market leaders, and ultimately cause the obsolescence or failure of firms unable to adapt. Schumpeter emphasised how innovation clusters drive periods of rapid growth, investment surges, and, frequently, speculative excess.
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Carlota Perez: In Technological Revolutions and Financial Capital (2002), Perez advanced a model of techno-economic paradigms, proposing that every major technological revolution (e.g., steam, electricity, information technology) proceeds through phases: an initial installation period—characterised by exuberant capital inflows, speculation, and bubble formation—followed by a recessionary correction, and, eventually, a deployment period, where productive uses of the technology diffuse more broadly, generating deep-seated economic gains and societal transformation. Perez’s work helps contextualise Solomon’s caution about markets running ahead of potential.
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Charles Kindleberger and Hyman Minsky: Both scholars examined the dynamics of financial bubbles. Kindleberger, in Manias, Panics, and Crashes, and Minsky, through his Financial Instability Hypothesis, described how debt-fuelled euphoria and positive feedback loops of speculation can drive financial markets to overshoot the intrinsic value created by innovation, inevitably resulting in busts.
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Clayton Christensen: Christensen’s concept of disruptive innovation explains how emergent technologies, initially undervalued by incumbents, can rapidly upend entire industries—creating new winners while displacing former market leaders. His framework helps clarify Solomon’s points about the unpredictability of which companies will ultimately capture value in the current AI wave.
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Benoit Mandelbrot: Applying his fractal and complexity theory to financial markets, Mandelbrot challenged the notion of equilibrium and randomness in price movement, demonstrating that markets are prone to extreme events—outlier outcomes that, while improbable under standard models, are a recurrent feature of cyclical booms and busts.
Practical Relevance in Today’s Environment
The patterns stressed by Solomon, and their theoretical antecedents, are especially resonant given the current environment: massive capital allocations into AI, cloud infrastructure, and adjacent technologies—a context reminiscent of previous eras where transformative innovations led markets both to moments of extraordinary wealth creation and subsequent corrections. These cycles remain a central lens for investors and business leaders navigating this era of technological acceleration.
By referencing both history and the future, Solomon encapsulates the balance between optimism over the potential of new technology and clear-eyed vigilance about the risks endemic to all periods of market exuberance.
