Goldman Sachs Partner Warns AI Could Erode Critical Thinking Skills in Next Generation of Bankers

Goldman Sachs partner warns of 'huge danger' in letting AI replace bankers' reasoning skills

* AI could erode bankers' reasoning skills if employees rely on models to do their analytical work, warns Chris Churchman, who leads Marquee, Goldman's digital platform for institutional clients. * Banks need to find a balance between using AI and preserving Wall Street's apprenticeship culture, Churchman said in an interview on the firm's "Exchanges" podcast. * Goldman is still figuring out how to balance AI with human involvement, said Churchman. One of the biggest challenges with generative AI is around accuracy, he said. In this article * GS Follow your favorite stocksCREATE FREE ACCOUNT A screen displays the the company logo for Goldman Sachs on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., May 7, 2025. Brendan McDermid | Reuters A Goldman Sachs partner leading one of the bank's flagship artificial intelligence projects warned that AI's spread across Wall Street risks hobbling the thinking capabilities of the next generation of financiers. "There's a huge danger here that in the era of AI, we outsource our reasoning to these models, and we have cognitive atrophy that stops us being able to reason from first principles ourselves," said Chris Churchman, who leads Goldman's digital platform for institutional clients called Marquee. The comments came during the latest episode of the firm's "Exchanges" podcast, according to a transcript provided exclusively to CNBC. Just as people lost navigation and memorization skills with modern inventions, bankers risk losing analytical abilities if algorithms handle all the heavy lifting, Churchman said. "Reasoning is still important," he said. "You still need to reason about [problems] and structure it into an argument, and now we're delegating reasoning." Wall Street's push to enmesh AI into all of its trading and banking processes could be a kind of devil's bargain: It will make the industry more profitable today while potentially eroding the talent it needs for tomorrow. With AI taking over more of the routine work that has traditionally taught young bankers and traders how to think and make decisions, firms risk sacrificing the culture that turns junior employees into seasoned Wall Street talent. It could even reduce the need for junior bankers in the first place. Last year, CNBC reported that Wall Street firms were examining ways of using AI to lower the ratio of junior bankers to senior employees. Banks need to find a balance between using AI and preserving Wall Street's apprenticeship culture, said Churchman, who ran currency trading at UBS before joining Goldman in 2021. "You learn by doing, and a lot of knowledge is tacit, it was never written down," he said. Goldman needs "to make sure we don't lose that tacit and intuitive knowledge that some of our best people have today [and] to ensure the next generation have it too," Churchman said. For instance, junior traders learn by fielding client pricing requests under supervision of experienced risk takers, Churchman said. "We can absolutely automate that," he said, "but then do we get the senior traders that fully understand?" Systems must be designed so that employees still call the shots in high-stakes, high-uncertainty decisions rather than becoming passive operators, Churchman said. Even Goldman, one of the world's top investment banks, hasn't yet "figured out" how it will manage the transition the company has begun, said Churchman, who is also co-chair of the firm's Global Banking and Markets AI working group. Error-free? Also in the podcast interview, Churchman shared lessons from implementing AI into Marquee, which is used by hedge funds and other institutional clients to access Goldman's market data, research, risk analytics and trade execution services. The Marquee AI platform is only available to Goldman employees for now, he said. The toughest challenge, from a technical standpoint, is in ensuring that AI answers are 100% factual and can be audited, he said. While consumer AI chatbots warn users of possible mistakes, in high finance, the tolerance for errors is low. Churchman said that in developing the firm's AI platform for clients, the software made a startling admission. "When we challenged it hard, at least it was honest," Churchman said. "It was like, 'Look, in the end, I'm better at sounding thorough than being thorough.'" Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.

Goldman Sachs partner Chris Churchman warns AI risks banker skills

Chris Churchman, who leads Goldman's Marquee platform, said AI risks causing "cognitive atrophy" among junior bankers who outsource thinking to algorithms Chris Churchman, a Goldman Sachs $GS partner who leads the bank's digital platform for institutional clients, warned Monday that the spread of AI across Wall Street risks degrading the analytical abilities of the next generation of bankers. "There's a huge danger here that in the era of AI, we outsource our reasoning to these models, and we have cognitive atrophy that stops us being able to reason from first principles ourselves," Churchman said during an episode of Goldman's "Exchanges" podcast, according to a transcript provided to CNBC. Churchman, who also serves as co-chair of Goldman's Global Banking and Markets AI working group, compared the dynamic to the way GPS and search engines quietly hollowed out skills people once built through practice. When algorithms absorb the work that used to build judgment in young bankers and traders, he argued, the pipeline of seasoned talent begins to break down. "You learn by doing, and a lot of knowledge is tacit, it was never written down," Churchman said. Junior traders, for instance, build their instincts by working through client pricing requests alongside veteran risk takers who can guide them in the moment. Automating that process could mean senior traders never fully develop their own understanding, Churchman said. "We can absolutely automate that," he said, "but then do we get the senior traders that fully understand?" Goldman needs to preserve the knowledge that its best people hold today and ensure the next generation acquires it as well, he said. Employees should be the ones making the final call on consequential decisions, he said, and not simply ratify whatever an automated system recommends. Churchman said Goldman has not yet determined how it will manage that transition. "You still need to reason about [problems] and structure it into an argument, and now we're delegating reasoning," he said. Churchman also reflected on the engineering challenges involved in bringing AI capabilities to Marquee, the Goldman platform through which hedge funds and other large clients tap into the bank's market data, research, analytics, and execution tools, according to CNBC. The Marquee AI features are currently available only to Goldman employees. Getting AI outputs to be consistently correct and traceable is the steepest technical obstacle, he said, because the margin for error in finance is far narrower than what consumer chatbot users routinely accept. At one point during development, Churchman said, the platform surprised the team by volunteering its own limitations unprompted. "It was like, 'Look, in the end, I'm better at sounding thorough than being thorough.'"

Goldman Sachs Safeguards Apprenticeship Culture in AI Era | PYMNTS.com

Speaking during an episode of Goldman Sachs' podcast, Exchanges, Churchman said an overreliance on AI could lead to traders becoming passive operators and junior traders losing the opportunity to learn the "tacit and intuitive knowledge" held by senior traders, according to the report. While embedding AI in trading and banking processes will make the industry more profitable today, there is a risk that it could reduce the industry's apprenticeship culture, per the report. "There's a huge danger here that in the era of AI, we outsource our reasoning to these models, and we have cognitive atrophy that stops us being able to reason from first principles ourselves," Churchman said in the report. Goldman Sachs is still figuring out how it will manage this while transitioning more systems to AI, per the report. Goldman Sachs published research Wednesday (Aug. 19) that found that AI displacement could be stronger among entry-level employees. The report also found that employment in highly exposed industries such as call centers, software publishing, advertising services and management consulting have seen slower job openings growth since the second half of 2022. In June, Goldman Sachs estimated that over 9% of U.S. jobs could be displaced by generative AI over the next 10 years. The company also estimated that artificial intelligence will generate new jobs over the long run and add to the 25 million to 35 million new jobs that are already created each year by the U.S. economy. Together, these trends mean that the peak unemployment rate impact of AI would be less than 1%, per the report. The PYMNTS Intelligence report "Financial Services Pulls Ahead in the Enterprise AI Race" found that financial services firms are "going all in" on AI and that these firms have deeply embedded AI into revenue recognition, credit scoring and sales forecasting. "The industry's most adopted use cases cluster in structured, auditable back-office functions: the internal operations that keep a business running but that customers never directly see," the report said.