Big warning from David Solomon, CEO of Goldman Sachs: Markets will experience a "drawdown" during the next one to two years.

Given that the AI boom has the potential to produce a bubble akin to the dotcom period, Goldman Sachs CEO David Solomon projects a stock market decline in the next 12 to 24 months. However, he remains hopeful about AI's future advancements.

Goldman Sachs CEO David Solomon told CNBC that some people will probably lose money in the upcoming "drawdown" from the AI boom in the equities markets.

AI has caused the stock markets to soar to all-time highs, but Solomon believes that, due to the nature of market cycles, "there are going to be winners and losers" over the next year or two.

"I won't be shocked if the equity markets decline."
Speaking on October 3 at the Italian Tech Week in Turin, Italy, Solomon cited the dotcom bubble of the early 2000s as a benchmark for his assessment of the AI market growth, according to CNBC.

"The market usually runs ahead of its potential... there are going to be winners and losers," he said, adding that "historically, whenever we've had a significant acceleration in a new technology that creates a lot of capital formation and therefore lots of interesting new companies around it," the market runs in cycles. He went on to say that while the widespread use of the internet in the late 1990s and early 2000s gave rise to tech behemoths, it also caused the "dotcom bubble."

"A similar phenomenon will be observed here. I wouldn't be shocked if the equities markets saw a decline over the course of the next 12 to 24 months. I believe that a significant amount of capital will be spent that ultimately fails to generate returns, and when that occurs, people will not be pleased," Solomon stated.

"Those on the risk curve, not the bubble,"
"I'm not going to use the word bubble, because I don't know, I don't know what the path will be, but I do know people are out on the risk curve because they're excited," Solomon continued, warning investors that he was hesitant to refer to the AI boom as a "bubble."

Additionally, when [investors] are excited, they tend to minimize the things you should be skeptical about that could go wrong and instead focus on the positive things that could happen. There will be a drawdown, a check at some point, and a reset. The duration of this [bull run] will determine how much of it occurs," he continued.

On the other hand, Solomon was enthusiastic and upbeat about AI in general. "I have excellent sleep. I'm not going to worry about the future every night before bed.