Goldman Sachs CEO David Solomon has cautioned that recent concerns about private credit should remind investors the credit cycle remains active, not repealed. His annual shareholder letter highlighted growing worries about non-bank lending, particularly exposure to tech companies that could face disruption from artificial intelligence.

Solomon noted an unusually long period of cheap borrowing and low default rates since the 2008 financial crisis, but warned that conditions may be shifting. The private credit industry's large exposure to software companies vulnerable to AI disruption has raised red flags. His comments follow rival JPMorgan Chase tightening lending to private credit groups amid mounting concerns over credit quality.

Despite volatility in risk assets and geopolitical uncertainty, Solomon sees potential for improved dealmaking in 2026. He cited government stimulus, looser monetary policy, AI infrastructure spending, and reduced US regulatory oversight as powerful catalysts for risk assets. However, he emphasized that higher market volatility and elevated geopolitical risks require diligent risk management from investors and financial institutions.