Goldman Sachs Chairman on Why Finance Adopts AI Differently | a16z

anybody who's investing, you know, you're doing two things. You're trying to make money for yourselves and your clients, and so you're trying to get out there and take risk, and you're also trying to be a risk manager, and you have to do bo…

the way, it doesn't mean I like crises and I wouldn't go out of my way to volunteer to be in one. It's just that when it happens, I I I generally have confidence that I'm not going to get dis that I'm not trying to tempt the fates. If I'm g…

you know, maybe just to transition a bit to Goldman, um, you one of the things I've always found kind of remarkable about the firm's history is that, um, it wasn't a business built through a series of bank mergers. >> Right. >> Right. Unlik…

yourselves and for your, you know, your investors and your clients. And so, you're trying to get out there and take risk. And you're also trying to be a risk manager, which is, you know, you look, you know, it's almost like you bifrocate yo…

losses, you learn that the first day. Sure. I mean, of course, everybody and I'll tell you one other thing is very important on the loss side. People can lose money. You could lose money because somebody's stupid >> or you could lose money …

the financial area is you know wants to be on top of it and it's so interesting by the way there's a lot of you end up in a lot of culde-sacs you'll end up you know going down bad paths because you you just don't know >> sure >> and you uh …

I mean by partnership culture partners own the firm right >> the employees there especially the senior part the senior people are your co-owners of the partnership to the extent that you're a senior partner a lot of it is by consent of the …

with the enterprise as a whole >> Yep. >> and sacrifice in the short term they get to use the platform and exploit it for their professional career and their personal career. Yep. So you got to get the you know it's like I use as a metaphor…

They weren't going to be, you know, they, you know, their platform was subordinate. Again, we weren't asking people to subordinate their egos forever or not, you know, hide themselves or not be, you know, famous or wealthy. We just said tha…

>> of the S&P 500 and, you know, put out the money in the market and hedged it by selling it in the forward market. Would that give them what was the embedded rate of return?" And it was very high because they were the other side >> of spec…

were AAA. When you went when we made people sell them, the bids vanished >> and they weren't there. And the bids were much lower and then much lower and then much lower. By the way, I didn't think there was the market was right. I thought t…

to their spouse and every night they're talking about you. >> Totally. >> Do you realize that? >> Totally. >> They don't realize that. >> You have to think of who you become and you have to have that sense of yourself before you can have an…

know and you're a student of history like does this strike you as sort of a similar technology to past you know product cycles is this time different like where are you on the spectrum of excited scared >> generally things don't never repea…

themselves a big problem. >> So before the a you know before the this this technological age not just AI but in general could you have had a mistake that could cost billions of dollars? Um, not really because your intuition you wouldn't. Bu…

pretty po and by the way internationally Russian tanks went into in ' 68 were went into Czechoslovakia. So I I would say that was a bit more danger. The country during the Cuban missile crisis was at Defcon 2. You know by the way the lower …