Jamie Dimon Talks Growth of AI, Jobs, Government Shutdown

Bloomberg Audio Studios, podcasts, radio news.

Jamie, we're talking about the fact that you have lent into technology over the last decade, billions of dollars invested across the business. When it comes to AI, which parts of the JP Morgan business are they'll be most transformed by AI.

So we already we've been doing AI since twenty twelve. So people think it's a new thing. Jen AI is kind of new, but not all of it. We have two thousand people doing it, spend two billion dollars a.

Year on it.

It affects everything risk, fraud, marketing, idea generation, customer service, and it's kind of the tip of the iceberg. And so we know we're deploying it. Every time we meet us a business, we ask what are you doing? What are you doing to serve your people? Why can you do better? What are somebody else doing? So we're freely deploying it and safely. We have a lot of rules and regulations in place in our own data and how we use it, et cetera.

Is it having a material impacts on revenues for JP Morgan? If not now, then when so we have.

Shown that for that for two billion of expense. We have got two billion of benefit. We actually can do real detail.

We did this.

We wereduced headcount, we saved this time and money. We'duced areas. Some of you can't. It's just improved service something like that. It's like almost worthwhile worthless to say what's the MPV. But we know about two billion dollars of actual cost saves. And I think it's the tip of the iceberg. You were getting better and better at it. We know how to do it. As the managers learn how to do it, they're asking more questions why can't it do X? And why can't do yx? And then were on on my phone.

One hundred and fifty thousand.

People a week use it, so it's it's quite productive.

More and more of your employees are using the agentic AI our.

Own our own LLM, and Igentic is just starting, you know, but that will be deploying over time too. But it's also been used for coding. I mean, it's it's being used quite broadly now. And like I said, part of is getting your mind working around how you're going to use this thing, and so our managers and leaders.

Have to do it.

If you look out five years, are there more jobs in banking as a result of AI or fewer?

Look I think is I think people shouldn't put the head in the sand. It is going to affect jobs. So think of every application, every every service you do, will you'll be using AI, some to enhance it, some of it will be you doing the same job, You're doing a better job at it. There will be jobs that it eliminates, but you're better. Have been way ahead of the curve and retraining people, so we train and

When you look at the spend on AI infrastructure, chips open, AI, not lost, not making a profit, loss making. Dales have about of trillion dollars this year. The hyper scale is to spend there. What is your reaction when you see those numbers crossing? Are you comfortable with that kind of spend on the infrastructure around AI.

It's a lot.

I'm not sure it's all ever going to be totally spent. When you look at big tech, like tech that happens like this and you're go look at cars, you click at television, you click at internet. Big money's got spent. There were a lot of losers, a lot of winners. In total, it was productive. So take even take the Internet bubble and remember that blew up and amount of p I can united by the name one hundred companies that you know were worth fifty billion dollars and disappeared.

And of course those investments are part of what is powered this bull market in stocks. And on Sunday it will be three years of that ballmark. Where do you think we are in that ball market? Is this Is there any complacency there? Is it underpinned by rational factors? Is there more momentum?

Yeah? You know, look, we're in a ball market.

It has been clear as a price or high credits, breads a low consumers. Still okay, the consumer has jobs. Remember the jobs, jobs jobs. That usually starts to force people to cut back and change staying a consumers spend lesson companies cut back.

So far, so good. There are a lot of issues.

Out there that you know, the economy's got to deal with from all this geopolitical stuff, maybe they'll sort well.

Which could happen.

Inflation, I'm a little more nervous about inflation not coming down like people expect. That might be a surprise. And then in the hand there's a lot of spending. There's a lot of government spending which is inflationary too, by the way.

And so look, I don't know. I hope for the best, plan for the worst.

And you don't worried about a recession in twenty twenty six for the US you might not clear.

Yes, I think it could happen in twenty twenty six. I just I'm not worried about it. As a different statement, we'll deal with it, We'll serve our clients will navigate through it. A lot of it has been through them before. You don't wish it because you know certain people get hurt. But it could happen in.

Twenty twenty what's still a coose in the US government shot down, But I.

Do think they're positives, like deregulations are real positive which also helps animal spirits that are positive. And you know in the one big beautiful build is also more stimulus that has positive for the economy, but maybe negatives for inflation.

So how it all sorts.

Out, We'll see markets are looking through the US government shutdown. Is there a period of time if this shutdown continues where markets start to wake up and become concerned?

I don't think so. Look, I don't like shutdowns.

I think it's just a bad idea, and I don't care what the Democrats republics say.

It's a bad idea. It's not a way to run a railroad.

I don't think it's critic We've had I forgot the number four or five or six. You know, one of them went for thirty five days. I'm not sure anyone really affected the economy the market in a real way.

You mentioned inflation. You said you're a little bit more concerned about inflation than maybe some others. Markets pricing in about a hundred basis points of cuts between now and this time next year from the Fed. Does that therefore seem reasonable to you? Or markets are over their skis in pricing.

I think, you know, markets have to make a forecast. I want to point out that forecasts have almost always been wrong, and the Fed's been wrong too, so it doesn't like their forecast is you know, going to be accurate if inflation does go up, starts ticking up for whatever reason, and it might you know, it's gonna be hard to do one hundred points.

They might do some, you know, and then they.

Have the battle, you know, the give and take of if employer starts going up, we obviously gonna do some.

So we'll say you've long talked about geopolitics as being a risk factor. We're seeing gold at four thousand dollars. We're seeing bitcoin at record highs. The dollar, though yet to date, down about eight percent on the Bloomberg Dollar Index. Are you staying structural shifts out of the US dollar? And is that sustained theme.

A little bit?

But again I wouldn't have heart burned over it. The dollar did well for a long time if you own US stocks, So foreigners owned something like thirty five trillion dollars of US docks and bonds. And because this dock mark's gone up, your allocation the US has gone up. I think it's perfectly reasonable for investment committees in Europe and around the world to cut back a little bit

In the world to invest in long term and deal making seems to be picking up, and of course JP Morgan played a significant role in the takeover. The take private of EA twenty billion dollars in financing provided by JP Morgan. Is that a marker in the sand?

Is that?

Is that a one off as a deal of that type or is it a sign of a more competition between frankly, the banks and private credit.

Well, we're agnostic about private credits, so there maybe competitions or not. We want our customers to do with their interests. We work for both, you know, and we did that whole deal in eleven days, and we didn't do it that way to make a point to private credit, you know, Dave said do it differently, and we could have done it differently too, and so. But there's a lot of merger talk, there's a lot of firepower, there's a lot of tech. You know, we had a bunch of IPOs

When you talk about credit and you talk about debt.

I'm thinking of some dates in fact that JP Morgan put out on auto loans biggest losses in the most recent months, I think since twenty twenty March of twenty twenty. Is that idiosyncratic to auto that means in the US or you seeing other weak links being stressed.

I think you know, there were one or two frauds which I won't go through, but in general, consumer credit was so good. It's basically most of us just normalizing for both credit card but subprime order is a little bit worse than normalizing. It doesn't look like it's getting worse mirror, but it might.

But a lot of that.

If you look at the history of credit for consumers, it's employment is when employment or home prices go way down, which you know we don't maybe not expect that, that drives you know, credit.

The administration is talking about possibly challenging the requirement around quarterly earnings, and you've talked about this, You've written about this bor and Buffett around the guidance part of earnings and quarterly guidance. Would you welcome a change like that and would it mean a change to JP Morgan in terms of how often.

You Yeah, I would welcome in.

We still play update investors quarterly with much less stuff, and we just very transparent. I think the bigger problem was just reporting quarterly. It was forecasting, where you know, CEOs get their backup against the wall. They have to meet these things earnings and they start doing dumb stuff to meet earnings, and that kind of public pressure. I think it's a smaller part of a much bigger problem.

For a small cut to go public.

So I think, and they're trying to do that here, have an active small company going public. You all need and create an equity culture, which Rachel Reason is trying to do here. And I think they're doing a good job reducing regulations, you know, trying to make it easier to do business and you know, reducing regular banks, but also in business in general, you want an active market and we've kind of crushed it and could the research

I need to talk to you about some other changes that the Trump administrations take. You are a champion of capitalism and free market capitalism. So when you see states taken by the administration or the US government's put it that way in terms of intel golden share for US steel investments in the lithium mind producer, how does that sit with you?

So the first thing is there are legitimate complaints around trade. So just take that first somewhere around just unfair trade. It's unfair to use, you know, not just tariffs. It's surpluses, it's capital, it's quotas, it's just you know, it's the non tariff parers. And then there's national security related so I think a national security you have to take some special thing I called industrial policy.

But it's not to be done right.

It's got to come with permitting no virtual signaling. And so like the deal it was done for MP, I thought they did a very smart thing. They're giving MP which we were part of banking. You know, it does rare Earth's magnets a chip because they're gonna have a long term contract with the government. It gives them a chance to survive, to get through it. They call the Value of Death, and they bought a piece to go into it. So I thought that was really well done.

Why are you doing it? What's the long term benefit? You know?

And then of course you know if Democrats get in powered, they're gonna do even more of it, So I would be very cautious about how you go about that. I do think they need to do more. You cannot do certain things in the United States. You think a company's gonna do it, they'll be They'll be bankrupt in seven months. They either need freelam and cheaper financing. And maybe the most important is long term purchase agreements with defense or company to something that gives me a real chance to.

Build a business.

You touch on the fact that we're here in the UK, the chance a little here. She addressed the summit, she dress the conference, she's making those changes. Is the UK doing enough? They're going to be potentially some changes when it comes to listings. They may be announced in the budget in November. Is enough being done to make the UK to make London an attractive listing destination again.

Well, at first of all, it's come here. It's a wonderful city. It's a melting pot. The brain power is extraordinary, and I'm talking about not just financial but lawyers and technology, media. It's it's unbelievable. It's a huge benefit to your to UK, though I'm not sure the rest of the UK appreciates that much. And they are there's saying the right things. They're deregging. It's not just banks but business in general,

They're you know, they're.

Trying to create a consolidate the pension and save these schemes. So I think it's very smart have a little more of an equity risk culture, you know, not to lose money, but to take a little more risk. And maybe some of these tech companies here. Yeah, I apployed everything they're doing. I know the you know, the public here doesn't applaud as much as I do. But they have to keep going.

H one B visas in the US talking about attracting talent one hundred thousand dollars, is that a barrier to the US tech sector.

You concerned about it, I'm not. Again. I've got Harpero. It's six hundred thousand employees. That's it.

We have one hundred and sixty million people working. And I do think you know, these things happened. I didn't like when I first. I still don't particularly like it, but but you know what it was being abused. We did the analysis and the work. It was not supposed to be to bring cheaper workers here to make more money for your company. It was meant to bring very talented people and you don't necessarily have to for your company, and we do. We may have made some mistakes, but

You speak to the President every week, No, okay, I've spoken him a couple of times. Jamie Donald, chairman CEO JP Morltman, thank you very much and dank I appreciate it.