John Waldron on GDP Growth, AI, and the M&A Outlook

Market Sentiment & Economic Outlook

• Business leaders and investors remain generally optimistic, though more cautious at the margin compared to six to 12 months ago due to higher inflation and rates.
• Inflation and geopolitical tensions (specifically regarding Iran) are identified as primary drivers for increased caution in corporate 27-year planning.
• Nominal growth in the U.S. is forecast to exceed 6%, driven by strong end-demand and resilient earnings despite higher costs of capital.
• Real growth is projected at approximately 2.5% (potentially reaching 3%), with inflation expected to begin migrating downward.
• Regional sentiment diverges significantly: the U.S. and Asia show strength, Europe faces muted growth due to energy security and geopolitical risks, and China exhibits a "tale of two cities" with weak domestic demand but strong innovation and export growth.
• Japan is experiencing a resurgence in growth, loan demand, and asset management opportunities, contrasting with the broader negative sentiment in Europe.

M&A Activity & Corporate Strategy

• M&A volume is projected to grow 30–35% this year, potentially setting a record year driven by strong backlogs and pipelines.
• A distinct market bias toward "scale" is emerging, where larger companies attract more capital and generate higher returns.
• M&A transactions are characterized by simultaneous "offensive" (consolidation) and "defensive" (carve-outs, spins) strategies as firms optimize for focus.
• CEO confidence is underpinned by robust capital raising and AI-driven investment trends.

Growth Opportunities & Strategic Priorities

• Goldman Sachs identifies capital formation for AI infrastructure, decarbonization, and global growth as a primary opportunity, with a shift of responsibility from levered governments to the private sector.
• The firm is bullish on Asia, citing significant economic growth and strategic investments in key markets.
• Asset and wealth management are prioritized as major growth engines to address the massive wealth creation of the last decade.
• Recent acquisitions (Industry Ventures, Innovator, Neos Investments, LCN Capital Partners) aim to fill gaps in asset classes, solutions, and distribution rather than broad expansion.
• Partnerships, such as the arrangement with T. Rowe Price, are utilized to access capabilities (e.g., retirement platforms) the firm cannot efficiently build organically.

Artificial Intelligence Strategy

• Goldman Sachs has implemented a four-pronged AI strategy: employee literacy/adoption, software development efficiency, organizational automation (digital agents), and client-facing advisory tools.
• Early productivity wins have been observed in software development lifecycles, with expectations for acceleration in these gains.
• Automation via digital agents is being deployed to re-engineer human-centric "interstate" processes to enhance resilience and scalability.
• Client tools aim to combine extensive Goldman Sachs data, human judgment, and Large Language Models (LLMs) to deliver faster, better advice.
• AI deployment is expected to expand significantly in 2027 compared to 2026, leveraging partnerships with hyperscalers and compute providers.

Culture & Talent

• The firm maintains a "One Goldman Sachs" culture focused on collaboration, viewing digital agents as tools that serve client outcomes rather than replacing human capital.
• Acquisition integration relies heavily on cultural fit checks during the diligence phase to ensure new entities align with Goldman Sachs values.
• Key advice for new talent includes cultivating intellectual curiosity, leveraging AI to accelerate learning, and actively working to improve personal weaknesses.
• The firm expresses strong optimism regarding the potential for young talent to thrive in an AI-augmented environment, rejecting campus concerns about job market hospitable.

Key Data Points & Dates

• Goldman Sachs platform assets exceed $4 trillion.
• The U.S. economy is projected to have nominal growth of over 6% and real growth of 2.5% to 3%.
• M&A growth is forecast at 30–35% for the current year.
• The interview was recorded on November 3, 2026.