Goldman Sachs is unveiling a comprehensive plan to deploy AI within its operations to yield efficiencies and find new revenue sources. 

The $598 billion investment bank began collaborating with Cognition Labs earlier this month to test its autonomous generative AI agent, Devin. The agent is designed to transform the way Goldman Sachs builds, maintains and develops software with risk oversight and supervision of the bank’s engineers, Chief Executive David Solomon said during today’s second-quarter earnings call.

AI is “a big opportunity to automate processes, create efficiency and productivity,” Solomon said. “And it’s not just to take costs out. It’s also to create flexibility for us to make investments in other things that can drive more growth in our client businesses.” 

The agentic AI tool will allow coders at Goldman to “guide software development at a much faster pace and a much larger scale,” he said. 

“There’s a big belief that, as AI is deployed in the enterprise broadly, you can drive earnings growth and efficiency in a meaningful way,” Solomon said. 

READ MORE: Goldman Sachs to deploy AI coding assistant

Goldman also rolled out its gen AI-driven GS AI Assistant companywide this year; the tool is designed to help employees find information and assist in their research, Solomon said. 

The New York-based FI reported tech and communications expenses of $530 million during the second quarter, up 6% year over year. 

THE BIG PICTURE: Goldman Sachs is keeping a close eye on the evolving stablecoin regulatory landscape, Solomon said. 

“I think this market structure bill that is yet to come is very important in the context of the direction of travel” for the development of the asset class, Solomon said. “We think there are a handful of places where there could be interesting opportunity for us, potentially around funding.” 

The continued digitalization of the financial system takes friction out of the industry and creates opportunities for Goldman, he said.  

“We’ve got a very significant group of people at the firm that are really deeply focused on watching the evolution of this,” Solomon said. “There’s a heightened level of focus here, inside the firm, on how this will disrupt and change the competitive landscape and create opportunities.” 

JPMorgan Chase has already deployed JPMD, its own digital token, while Citi is evaluating issuing its own stablecoin. 

BY THE NUMBERS: In Q2, Goldman reported: 

• Total revenue of $14.5 billion, up 15% year over year; 

• Total operating expense of $9.2 billion, down 8% YoY;  

• Net interest income of $3.1 billion, up 56% YoY; and 

• Profit of $3.7 billion, up 18% YoY. 

OF NOTE: The investment bank expects its revenue to get a major boost from the anticipated re-starting of M&A activity after a subdued few years, Solomon said. 

M&A volume over the first half of the year was 30% higher year over year and 15% greater than the comparable five-year average, Solomon said. “From a regulatory perspective, there’s a confidence level on the part of CEOs that significant scaled industry consolidation is possible.”  

MARKET REACTION: Shares of Goldman Sachs (NYSE: GS) were down 0.78% at market close today to $707.44. BNY has a market capitalization of $216 billion.