Big Banks Warn of AI Froth as Bubble Talk Dominates Earnings (1)

As banks posted a record-breaking quarter for deal activity and trading revenue — driven in part by excitement about artificial intelligence — several Wall Street executives cautioned of over-exuberance in the AI industry.

Goldman Sachs Group Inc.Chief Executive Officer David Solomon alluded to the dot-com bubble during the company’s earnings call Tuesday, saying the bank’s aware of the risk that the tremendous investment into AI infrastructure might be followed by “a divergence where some ventures thrive and others falter.”

During the start to bank earnings season this week, executives routinely touted how they were using AI in their own ...