Banking titan Goldman Sachs believes the artificial intelligence boom is approaching a critical transition point, with the focus set to shift away from infrastructure buildout.
In a special edition of the Breaks of the Game podcast, Ashok Varadhan, co-head of Global Banking and Markets at Goldman Sachs, says the AI narrative is likely to pivot as early as 2026, moving from supply-driven expansion to real-world consumption.
“I think even though there’s a lot of focus on, of course, the huge hyperscalers and the incredible amount of demand that they’re seeing in their underlying businesses and how that’s creating all of the buildout, certainly of data centers, I think the story in 2026 is about how companies sort of adopt AI and incorporate it in their workflows and become more efficient and more productive as a consequence of that.”
Varadhan says the shift implies a move away from celebrating the scale of AI infrastructure spending and toward measuring how effectively AI is actually used inside businesses.
“And so I think things will pivot in short order, less to the supply side and more to the consumption of AI.”
Goldman Sachs isn’t alone in its view that AI will witness an inflection point next year. In a recent interview, Jordan Jackson, global market strategist at JPMorgan Asset Management, said that 2026 will be the year when the market begins to determine the winners and losers of the AI trade, rather than rewarding all names tied to the investment theme.
And Morgan Stanley executive vice president Katerina Simonetti said that next year, investors will demand tangible returns from AI investments, calling 2026 the “show me the money moment” for the AI trade.
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