‘At some point you’ve got to make money’: Goldman’s top AI skeptic warns the clock is running out ahead of OpenAI and Anthropic IPOs

For two years, Jim Covello has been asking the same uncomfortable question: when does Wall Street’s AI bet actually pay off? The head of global equity research at Goldman Sachs raised the alarm in a widely read 2024 report, questioning whether the torrent of capital flooding into artificial intelligence would ever generate returns commensurate with the spending. At the time, he estimated it would take 18 months to 2 years. Two years later, speaking on Goldman’s Exchanges podcast, he noted that he’s been having this debate for close to four years now — and his answer has only grown more pointed. “At some point, you’ve got to make money,” Covello said. “You make investments in a business so that you can generate returns and make money. And we’ve gotten further away from that over the last couple years instead of closer to it.” Speaking with Allison Nathan, Goldman’s senior macro strategist, and George Lee, co-head of the Goldman Sachs Global Institute — who has long taken a more optimistic view of AI’s potential — Covello laid out three reasons why that patience may be running thin and asked another question that runs counter to the market narrative. “If we’re having the same debate two years from now and we’re still saying, ‘Well, it’s early,’ then we might have a challenge,” Covello said, “because at some point, when does the short-term become the long-term?” Anthropic and OpenAI weren’t mentioned specifically on this podcast, but they are both nearing mega-IPOs, they are both valued at close to $1 trillion, and neither is profitable. The hill keeps getting steeper Covello acknowledged being wrong on some counts. Consumer adoption of AI has been, in his words, “magnificent” — far exceeding his expectations. And the technology itself has advanced rapidly. But on the question that matters most to investors, his conviction has harden