Dive Brief:
- For CEOs, the window of opportunity to scale their businesses through mergers and acquisitions, “candidly, trumps some of the geopolitical risk,” Goldman Sachs CEO David Solomon said Monday.
- Executives are “watching what’s going on geopolitically, but that’s also balanced by the fact that they see an opportunity during this period of time to drive scale, and scale creation in businesses with significant technological change,” Solomon said as the New York City-based lender – which is benefiting from the recent M&A surge – reported first-quarter earnings.
- Still, conflict in the Middle East caused initial public offering activity to slow in the first quarter, particularly in March, Solomon said. “Sponsor activity did not accelerate this quarter the way we might have thought, given the way things felt” in January, he said. The CEO expects activity to rebound given “pressure that’s mounting” and that some large IPOs are lined up.
Dive Insight:
Trump administration regulators have taken a more favorable view of M&A, leading executives, including those at banks, to pursue combinations that result in greater scale. That, in turn, has bolstered business for banks like Goldman. Yet geopolitical and market volatility have led to concerns of stalled dealmaking activity.
Goldman’s first-quarter global banking and markets revenues climbed 19% year over year, and 22% quarter over quarter, to $12.74 billion. Investment banking fees soared 48% year over year, to $2.84 billion.
Solomon continues to expect “significant activity” in M&A. “Unless the overall environment got much, much worse, I don’t see that slowing, based on what we see at the moment,” he said.
The CEO was also asked about the reported meeting between Treasury Secretary Scott Bessent, Federal Reserve Chair Jerome Powell and big-bank CEOs, in which regulators warned bank executives of cyber risk related to Anthropic’s latest artificial intelligence model, Mythos.
Solomon, who attended the meeting, noted bank CEOs were in Washington, D.C. for a regular meeting of the Financial Services Forum, a trade group representing the eight largest U.S.-based banks.
Goldman has long directed “enormous resources” toward managing cyber risk, and it’s not the first meeting that group has had with the Treasury Department regarding such risk, Solomon said.
As large language models evolve rapidly, “we’re hyper-aware of the enhanced capabilities of these new models,” he said.
“With the help of the U.S. government and the model publishers, we are very focused on supplementing our cyber and infrastructure resilience,” he said. “This is part of our ongoing capabilities that we have been investing in, and are accelerating our investment in.”
The bank has the Mythos model, and is working closely with Anthropic “and all of our security measures to harness frontier capabilities wherever it’s possible,” he said.
“As technology evolves, we have to continue to upgrade in cyber risk, to make sure we're at the forefront of that,” the CEO said.
As the bank has built out One Goldman Sachs 3.0, its AI-powered operating model, early learnings have underscored a need to double down on foundational components, CFO Denis Coleman said.
“We are therefore accelerating our investments in cloud migration and in the accuracy, completeness and timeliness of our data,” Coleman said. “These investments are critical to optimizing the deployment of AI solutions across the firm, which will allow us to unlock greater productivity and efficiency opportunities over time.”
Goldman Sachs’ profit jumped 19% in the first quarter, to $5.63 billion, on a 14% rise in revenue, to $17.23 billion, the bank said Monday. Those figures were the second-highest in the bank’s history, Solomon noted.
But the bank’s fixed income, currency and commodities revenue fell 10%, to $4 billion.
The bank’s operating expenses increased 14%, to $10.43 billion. That was also 7% higher than the fourth quarter of 2025. That jump was largely due to “significantly higher” transaction-based expenses and higher compensation and benefits expenses.
