Uncertainty about how artificial intelligence will change corporate business models is set to complicate lenders' decisions on the amount of risk to assume over the next two years, a senior executive at Goldman Sachs said.
The concern is not confined to equity markets, the executive added, but has spread into credit markets and is influencing the capital-raising process for companies exposed to AI-related disruption. Software stocks have been declining for several months, a movement that has also weighed on the shares of asset managers that have invested in or extended credit to those software companies.
Mahesh Saireddy, co-head of the Goldman Sachs Capital Solutions Group - a unit established last year to finance large transactions and extend loans to corporate clients - said the uncertainty extends beyond the technology sector and is prompting broader caution.
"It's not just software, it's other industries that are getting disrupted that will get a lot more attention," he said at the Bloomberg Invest conference in New York. "For the next six, 12, 24 months, there's going to be a lot of unknowns. So it is going to be a challenging time to underwrite things."
Saireddy's remarks highlight the friction lenders face when underwriting in an environment where the pace and reach of AI-driven change remain unclear. The combination of falling share prices in software and stress for asset managers with exposure to the sector are cited as part of the broader set of market signals that are influencing credit conditions.
Because the Goldman Sachs Capital Solutions Group was created specifically to finance large deals and provide credit solutions to corporates, Saireddy's comments underscore how firms that sit at the nexus of financing and risk assessment are recalibrating their approaches amid what he described as a period of heightened unknowns that could last six to 24 months.
The account points to a widening of market concerns from a single sector into credit and capital markets, suggesting lenders and capital providers will face tougher choices about what risks they are willing to accept while assessing borrowers across industries that may be vulnerable to AI-driven disruption.
Length and scope note: The statements reflect the executive's observations about market and underwriting conditions as presented at the conference, including the timeframe he cited for uncertainty.