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Artificial Intelligence

Whinnying Horses

Goldman Sachs Head During Financial Crisis Says He “Smells” a Similar Crash Coming

“I don’t feel the storm, but the horses are starting to whinny in the corral.”

By Victor Tangermann

Published Mar 4, 2026 11:01 AM EST

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For quite some time, investors have been warning that the hundreds of billions of dollars being poured into the buildout of enormous AI data centers could trigger a credit crisis. A recent Bank of America survey found that over a third of fund managers believe corporations are overinvesting in physical assets.

Yet all told, AI companies are looking to spend a record-breaking $650 billion on AI in 2026 alone, an astronomical sum that has investors on edge, especially considering how massively unprofitable AI ventures have been to date.

To Lloyd Blankfein, who led Goldman Sachs through the 2008 subprime mortgage crisis, it’s entirely reasonable to prepare for an impending jolt to the system, especially considering the tone of investors discussing the enormous accumulation of debt.

“I wonder where there’s hidden secret leverage,” he told Citadel’s cochief investment officer Pablo Salame during a recent interview, as quoted by The Telegraph. “Now everyone says, ‘Oh, the world’s not leveraged.’”

“That’s exactly what everybody said in the mortgage crisis until you suddenly discover that there was a lot of mortgage risk in Iceland,” he added. (The European nation’s entire banking system collapsed within a week in 2008, forcing it to seek emergency aid from the International Monetary Fund.)

“It sort of smells like that kind of a moment again,” he added, along with a poetically worded metaphor: “I don’t feel the storm, but the horses are starting to whinny in the corral.”

Blankfein argued that AI companies are looking to open themselves up to public investment at a very precarious time, potentially putting retail investors at risk.

“One has to worry about opaque assets where there’s illiquidity,” he told Salame. “We’re getting close to the end of late stages of cycles on this — and we’re due for a kind of a reckoning.”

If the bubble were to pop, potentially taking individuals with it, the consequences for companies could be severe.

“When you lose money for individual consumers — i.e. taxpayers and citizens — people in government get very, very upset. Regulators get very, very upset,” Blankfein said.

Blankfein is far from the first financial heavyweight to warn of impending turmoil. For instance, fund management firm Amundi’s chief investment officer Vincent Mortier told the Financial Times earlier this year that “whether there are excesses… in the equity market on AI is no longer questionable.”

“But to figure out which exact companies will be the losers and when this reckoning will happen is difficult,” he added at the time.

Other experts have long compared the AI industry boom to the dot-com bubble of the late 1990s, with some going as far as to claim a new crisis could be even worse.

Worse yet, such a “reckoning” could send major shockwaves across global markets, potentially leaving taxpayers to pick up the tab. Investors worry that the entire US economy has turned into “one big bet on AI,” leaving the possibility that the AI bubble collapse could impact the fortunes of everybody.

Despite the many bold predictions of a financial crisis, the AI industry has held on, successfully convincing investors of the tech’s long-term viability. Companies including OpenAI and Elon Musk’s xAI, which was recently folded into his space company SpaceX, are reportedly preparing for “eye-popping” initial public offerings.

But to Blankfein, the longer we wait, the more severe a collapse.

“The longer it takes between reckonings, there is a potential for a more severe reckoning,” he told the Financial Times in a separate interview. “I’m not saying it’s going to happen tomorrow or what direction it comes from. But when something goes off you’re going to find all the assets that have been carried at prices that can’t be realised in the market.”

More on the AI bubble: Investors Concerned AI Bubble Is Finally Popping

Victor Tangermann

Senior Editor

I’m a senior editor at Futurism, where I edit and write about NASA and the private space sector, as well as topics ranging from SETI and artificial intelligence to tech and medical policy.