Goldman Sachs targets India and China as AI spending accelerates

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Goldman Sachs targets India

Highlights

Goldman sees strong Asia growth driven by AI investment.
India has 42 AI enablers benefiting from technology demand.
Hong Kong IPO activity remains strong despite tighter scrutiny.

Kevin Sneader, Goldman Sachs president for Asia-Pacific, highlighted the region's investment prospects during an interview at the Bloomberg New Economy Forum on Wednesday. He identified North Asia as a major beneficiary of AI infrastructure spending while emphasizing that India's role in the technology industry extends beyond developing large language models, Bloomberg writes.

India emerges as an AI investment market

Goldman Sachs has identified 42 publicly traded Indian companies that support AI development through infrastructure, technology services, and related capabilities. According to Sneader, the group has recorded collective market performance growth of approximately 60%, highlighting investor interest in businesses supplying the technology needed for AI adoption.

The findings challenge the view that India is disadvantaged because it lacks a globally dominant large language model. Companies providing computing infrastructure, technical services, and other supporting technologies can participate in AI investment without developing the underlying models themselves.

Goldman also sees opportunities for AI adoption across traditional industries. Sneader estimated that 42% of India's agricultural sector could benefit from AI-related improvements, suggesting considerable potential for productivity gains beyond the technology industry.

The bank expanded its physical presence in India by opening a larger Mumbai office last year, reflecting its interest in the country's growing corporate and investment banking market.

China and Hong Kong remain central to dealmaking

China presents a more complicated picture. Weak household consumption continues to weigh on domestic demand, but manufacturing and technology remain important sources of investment activity. Goldman Sachs intends to maintain its presence in the country, focusing on transactions driven by client demand despite persistent trade tensions between Washington and Beijing.

Sneader also pointed to continued momentum in Hong Kong's initial public offering market. Greater regulatory scrutiny of IPO pricing could improve transparency and strengthen investor confidence, although tighter requirements may also increase the work involved in bringing companies to market.

For investment banks, stronger issuance activity creates opportunities in underwriting, advisory services, and institutional financing. Goldman expects competition for those mandates to remain significant as both international and regional banks pursue Asian clients.

AI spending broadens the investment banking opportunity

The regional outlook illustrates how AI investment is creating opportunities beyond semiconductor manufacturers and software developers. Infrastructure providers, industrial companies, and businesses adopting automation may also require financing, acquisitions, or access to public markets.

India's 42 identified AI-related companies and the potential for wider agricultural adoption suggest that technology spending could support corporate activity across multiple industries. Meanwhile, China's manufacturing base and Hong Kong's listing market offer separate sources of investment banking revenue.

Goldman is also assessing how AI may affect its own operations. Sneader indicated that recruitment continues across business areas, while the longer-term consequences for staffing remain uncertain. Cost control remains a priority as the bank evaluates potential efficiency gains.

The central question is whether technology investment can sustain dealmaking despite weaker consumption in China and geopolitical uncertainty. For Goldman Sachs, Asia's increasingly diverse sources of growth provide opportunities that extend beyond any single market or technology sector.

We also reported Goldman Sachs upgrades its global equities view on earnings optimism.

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