Transcription
Jamie, we we're talking about the fact that you have leant into technology over the last decade, billions of dollars invested across the business when it comes to A.I., which parts of the Jp morgan business to be most transformed by A.I.?
Yeah. So we already we've been doing this since 2012. So people think it's a new thing. Jenn-air is kind of new, but not all of it. We have 2000 people doing it. It's been $2 billion 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 are we're deploying it every time we meet as a business. We ask, what are you doing that we could do to serve your people? Why can you do better? We're somebody else doing. So we're really deploying it and safely. We have a lot of rules and regulations in place by our own data and how we use it, etc.
Is it having a material impact on revenues for JPMorgan if not now, than when? We have shown that for that for 2 billion of expense, we have about 2 billion benefit. Some we actually can do real detail. We did this, we reduced headcount that we saved this time and money. But just there's some you can't it's just improved service and like that's like almost worthwhile worthless to say what's the NPV? But we know about $2 billion of actual cost saves. And I think I think it's the tip of the iceberg. It we're getting better and better at it. We know how to do it. As managers learn how to do it, they're asking more questions. Why can't we do X and Y can't do Y? And then we I know my phone here. We have a sweet switch on internal data to do research and summarize reports and, you know, scan contracts and do things like that. 150,000 people a week use it. So it's quite productive.
More and more of your employees are using your the agenda, of course. Own your own. Our own. LIM And I Genting 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 being used quite broadly now. And like I said, part of it 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? I look, I think it's I think people shouldn't put their head in the sand. It is going to affect jobs. So think of every application, every every service you do, you'll be using the 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 eliminate, but you're better off being way ahead of the curve and retraining people. So we retrain and redeploy a lot of people. So for JPMorgan, we're successful. We'll have more jobs, but there'll probably be less jobs in certain functions.
When you look at the spend on A.I. infrastructure, chips opening AI not lost it, not making a profit loss, making deals of about $1,000,000,000,000 this year. The hyperscale is the spend there. What is your reaction when you see those numbers crossing? Are you comfortable with that kind of spend on the infrastructure around A.I.? It's a lot. I'm not sure it's all ever going to be totally spend. I think when you look at big tech like tech that happens like this and you look at cars, you look at television, you look at Internet, big money is spent. There are a lot of losers. A lot of winners in total was productive. So take the take the Internet bubble. Remember that blew up and I'm not happy. I can you like by name 100 companies that were worth $50 billion and disappeared. But out of it came Facebook, YouTube, Google. You know so there will be some real big companies, real big success. It will work in spite of the fact that not everyone invest in is going to have a great investment return. And of course, those investments are part of what is power, this bull market in stocks. And on Sunday it'll be three years of that bull market.
Where do you think we are in that bull market? Is is there any complacency there? Is it underpinned by rational factors? Is there more momentum? Yeah, you know, look, we're in a bull market. There's been clear asset prices are high. Credit spreads allow consumers still. Okay. The consumer has jobs. Remember, jobs, jobs, jobs. What usually starts to force people cut back and change the consumer, spend less and can we 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 the geopolitical stuff. Maybe those are, well, what's going to happen to inflation? I'm a little more nervous about inflation not coming down like people expect. That might be a surprise. On the other hand, there's a lot of spending, there's a lot of government spending, which is inflationary to, by the way. And and so, look, I don't know. I hope for the best plan for the worst.
And you're not worried about a recession in 2026 for the US? You made that clear. I think it could happen in 2026. I just I'm not worried about is a difference. David We'll deal with it will serve our clients will navigate through it. A lot of has been through them before. You don't wish it because you know certain people get hurt but but it could happen to what's there of course, in the US government shutdown. But I do think there are positives like deregulation is a real positive, which also helps animal spirits in a positive. And you know, in the one big, beautiful bill, there's also more stimulus that has positives for the economy, but maybe negative for inflation. So how it all sorts out? Well, we'll see.
Markets are looking through the US government shutdown. Is there a period of time if this shutdown continues where Mark. It's not 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 or Republicans 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 35 days. I'm not sure anyone if it 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 and pricing? I think, you know, markets have to make a forecast. I want to point out the forecasts have almost always been wrong and the Fed's been wrong too. So it isn't like their forecast is, you know, going to be accurate if inflation does goes up, starts ticking up for whatever reason. And it might you know, it's going be hard to do 100 points. They might do some, you know, and then they have the battle, give and take of it. If unemployment starts going up, obviously they're going to do some. So we'll we'll see.
You've long talked about geopolitics as being a risk factor. We're seeing gold at $4,000. We're seeing Bitcoin at record highs. The dollar, though, year to date, down about 8% on the Bloomberg dollar index. Are you seeing structural shifts out of the US dollar and is that a sustained theme? Yeah, a little bit, But again, I wouldn't have heartburn over it. The dollar did well for a long time. If you if you own U.S. stocks or foreigners own something like $35 trillion of US stocks and bonds, and because the stock market's going up, your allocation in 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 their equity ownership. We've also seen people changing their hedge ratios and stuff like that. So it may just be a rational adjustment to, you know, I don't expect a stronger dollar or the tariffs has this effect, but it still, if you look at America, still the greatest place in the world to invest in long term and dealmaking seems to be picking up.
And of course, Jp morgan played a significant role in the takeover. The site driver of a $20 billion in financing provided by Jp morgan. Is that a marker in the sand? Is that is that a one off as is as a deal of that type, or is it a sign of a more competition between, frankly, the banks and private credit? Well, you know, we're agnostic about private credit, so there may be competition or not. We want our customers to do it. Their interest. We work for both, you know, and we did that whole deal in 11 days and we didn't do it that way to make a point to private credit. You know, they said do it differently. 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 attacking. We had a lot of IPOs in the U.S. I know we've only been a handful here. The tech world is still doing quite well. You know, the 800 companies here, I think it was 400 last year, We do have five or two bankers coming. The innovation economy globally around the world, including is like 50 alone here. So, you know, look, I'm a long term optimist. I do think asset prices are high, credit spreads are low. And, you know, you should take that in consideration. How you think about the future.
When we 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 2020, March of 2020 is that idiosyncratic to auto loans in the US or using other weak links, being being stressed? I think, you know, there was one or two frauds which I won't go through, but in general, consumer credit was so good. It's basically most of it's just normalizing for both credit card subprime orders a little bit worse than normalizing. It doesn't look like it's getting worse from here, 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 changing the requirement around quarterly earnings. And you've talked about this. You've written about this with Warren Buffett around the guidance part of earnings and quarterly guidance. Would you welcome a change like that? And would it mean a change at Jp morgan in terms of how often you. Yeah, I would welcome it. We still update investors quarterly with much less stuff and we've just be very transparent. I think the bigger problem was just reporting quarterly. It was forecasting where, you know, CEOs get their back up 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, is a smaller part of a much bigger problem. We've gone from 8000 public companies in 1996 to like 4000 today. And you know that I'm not sure that's good. We drive companies out of it. We have cookie cutter governance. They're not some activists are good, but they're activist is litigation. There's cookie cutter compensation. There's very expensive listing. There's, you know, disclosure rules, which you've heard about them here, I mean, endless rules. And that it makes it hard for small code to go public. So I think and they're trying to do that here, have an active small company going public, and that's what we all need and create an equity culture, which Rachel Rees was trying to do here. And I think they're doing a good job reducing regulations, trying. Make it easier to do business and reduce American banks, but also in business in general. You want an active market and we've kind of crushed it. Could the research laws and MiFID and disclosure requirements, If I was a regulator, I would take a step back and look at the whole system and say, how can we improve it and make it safer? You know, not and looking at holistically as opposed to just everything like a one off conversation.
I need to talk to you about some other changes that the Trump administration is taking. You are a champion of capitalism and free market capitalism. So when you see states taken by the administration or the U.S. government, let's put it that way in terms of intel. GOLDMAN share for us steel investments in a lithium mine producer. How does that sit with you? So the first thing is there are legitimate complaints around trade. So just take that first. Some are around just unfair trade. It's unfair to use. You know, it's not just tariffs, it's surpluses, capital. It's quotas. It's just, you know, the non-tariff barriers. And then there's national security related. So I think on national security, you have to take some special things I call industrial policy. But it's job done, right? It's got to come with permitting. No socially, no virtue signaling. And so, like the deal that was done for MP, I thought they did a very smart thing. The Giving MP, which we were part of banking, does rare earths magnets a chip because you can have a long term contract with the government, it gives them a chance to survive to get through, call the Valley of Death and and they bought a piece of going to us. I thought that was really well done. I'm not going to come in. All of them. I think it be very careful when you get involved in that kind of stuff. Why are you doing it? What's the long term benefit? You know, And then, of course, you know, if Democrats get in power, they're going to 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. The United States, you think a company are going to be they'll be bankrupt in seven months. They either need free land, cheaper financing. And maybe the most important thing is long term purchase agreements with defense or companies, something that gives them a real chance to build a business.
You touch on the fact that we're here in the UK. The Chancellor here, she addressed the summit. She has a conference. She's making those changes. Is the UK doing enough? There can 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, first of all, something here. It's a wonderful city. It's a melting pot. The brainpower is extraordinary. And I'm talking about Dutchess Financial, but lawyers and technology media, it's unbelievable. It's a huge benefit to Europe, to UK, though I'm not sure the rest of UK appreciates that much. And they are. They're saying the right things. They're dragging. It's not just banks but business in general. Reducing red tape. I call it blue tape. Now, you know the reducing red tape, blue tape there. You know, they're trying to create a consolidated pension and savings schemes. I think it's very smart. Have a little more of an equity risk culture there not to lose money, but to take a little more risk or maybe somebody tech companies here. Yeah, I applaud everything they're doing. I know the you know, the public here doesn't applaud as much as I do. But if they should, they have to keep going.
H-1B, H-1B visas in the US talking about attracting talent, $100,000. Is that a barrier to the US tech sector? Are you concerned about it? No, I'm not. Again, I could harp 600,000 employees. That's it. We have 160 million people working. And I do think, you know, these things happen. I didn't like when I first do. I still don't particularly like it. But. But you know what? It was being abused. I mean, we did the analysis in 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 in. You don't necessarily have to it for your company. And we do. We may have made some mistakes, but let's just fix the system. I was with the president once and he said more merit based. More merit based. In fact, I heard him say we should stamp a green card. And every person in this country who went to university or advanced degrees and have stay here and build their career, That would be my belief. I wanted to go back to that. Yeah, not not make it harder to be a make it easier for real merit based. It speaks to the you speak to the present every week. No. Okay. I've spoken a couple of times. Jamie Dimon, chairman, CEO, JPMorgan. Thank you very much indeed. I really appreciate it.