CEOs remain optimistic yet uneasy: David Solomon shares his Davos insights on deregulation and abrupt policy changes

Business Leaders Eye Investment Surge Amid Policy Uncertainty

As influential figures from the corporate world gathered in the Swiss Alps for the World Economic Forum, David Solomon, Chairman and CEO of Goldman Sachs, shared his perspective on the current business climate. According to Solomon, CEOs are poised to ramp up investments to unprecedented levels—if only U.S. policymakers can reduce what he calls the “scattershot” approach to legislation and regulation.

During a recent episode of the Goldman Sachs Exchanges podcast, Solomon described a business environment marked by a striking contrast. On one hand, the economic outlook for 2026 appears favorable for risk assets and financial markets, thanks to supportive monetary policies and a surge in investment—particularly in artificial intelligence infrastructure. On the other, executives remain uneasy about unpredictable government actions and ongoing geopolitical tensions.

“There’s a lot of external noise coming from Washington,” Solomon remarked. “CEOs are frustrated by what I’d call a scattergun approach to policy, which lacks the consistency they desire.” While regulatory changes have been steady, other policy areas remain erratic. “Frankly, leaders want less distraction and more focus on growth opportunities,” he added.

Mergers and Acquisitions Poised for a Comeback

Solomon’s most optimistic outlook centers on a revival in mergers and acquisitions, spurred by a significant shift in the regulatory environment. For several years, regulatory barriers made deal-making nearly impossible, with most proposals facing rejection. Now, with a more investment-friendly climate, executives are becoming increasingly proactive.

“Unless a major unforeseen event alters the landscape, 2026 could be a record year for M&A,” Solomon predicted. He also expressed confidence in the IPO market, noting that private equity firms—buoyed by strong valuations in 2020 and 2021—are preparing to bring more companies public as market conditions improve.

Kim Posnett, Goldman Sachs’ co-head of investment banking, echoed this sentiment in a recent interview. She predicted an upcoming wave of IPOs and highlighted that the M&A market has shifted from a period of recovery in 2025 to a more ambitious and strategic phase, with last year’s deal volume reaching $5.1 trillion—a 44% jump from 2024.

Policy Volatility Fuels CEO Caution

Despite their optimism, business leaders remain wary of the unpredictable nature of current U.S. policy. While deregulation is welcomed, the lack of consistency in other government actions is causing unease. Solomon likened the current approach to a shotgun blast—broad and unfocused, rather than targeted and deliberate. For those unfamiliar, a shotgun disperses many pellets over a wide area, increasing the chance of hitting something, as opposed to a rifle’s single, precise shot.

“When the environment is stable, CEOs are eager to invest and plan for the future,” Solomon explained. “But when uncertainty and noise dominate, they become more cautious.” He pointed to recent issues such as disputes over Greenland and European tariffs as examples of geopolitical developments that can cause companies to delay or reconsider investments.

Growing Divide Between U.S. and Europe

Solomon also brought a sobering message to his European peers: the economic gap between the United States and Europe is widening. He observed that, despite European leaders expressing a desire for more growth-oriented and finance-friendly policies, progress has been slow.

“Europe’s structural growth remains sluggish,” Solomon noted. With a population of about 450 million and an economy valued at $20 trillion, Europe’s growth rate lags below 1%. In contrast, the U.S., with 330 million people and a $30 trillion economy, enjoys a 2% growth trend. Solomon believes this disparity will continue to expand, attributing it to the U.S.’s more effective capital markets and technological infrastructure.

His remarks were echoed days later by President Donald Trump during a main stage speech at Davos, which touched on similar themes and drew mixed reactions from the audience.

Risks on the Horizon

Despite strong fundamentals, Solomon cautioned that unforeseen events—such as geopolitical crises, cyberattacks, or other unpredictable shocks—pose the greatest threat to the positive outlook for 2026. “The main thing that could derail this economic trajectory is an unexpected, significant event,” he warned. “These are the kinds of risks that are impossible to anticipate in advance.”