“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.” — Jamie Dimon, Chairman and Chief Executive Officer, JPMorganChase
Jamie Dimon said JPMorgan Chase & Co. spends $2 billion a year on developing artificial intelligence technology, and saves about the same amount annually from the investment. “We know that it’s got to billions of cost savings and I think it’s the tip of the iceberg,” the bank’s chief executive officer said Tuesday in a Bloomberg TV interview. Dimon has consistently touted the opportunities offered by AI, even if it eliminates some jobs. He has said his bank already has hundreds of use cases for the technology, which will likely grow, and has touted its ability to help humans cure cancer and move to shorter work weeks. Dimon spoke to Bloomberg’s Tom Mackenzie in London on Tuesday. In a letter to shareholders last year, Dimon likened AI technology to the “printing press, the steam engine, electricity, computing and the internet.” The New York-based bank has thousands of employees working on AI, and Dimon has said previously that the technology will be embedded in every one of the company’s processes, including trading, research, equity hedging and customer service, often as a sort of co-pilot. AI is likely to make dramatic improvements in workers’ quality of life, but as with every new technology, some jobs will also be lost, Dimon said in the letter – JPMorgan Chase & Co. is leading a roughly $5 billion loan financing to support Qualtrics International Inc.’s purchase of health-care survey firm Press Ganey Forsta, the latest in a wave of big deals to hit the leveraged finance market. Silver Lake-owned Qualtrics is buying out data and analytics provider Press Ganey in a transaction valued at $6.75 billion and hopes to close the deal in the coming months. Discussions are still ongoing and some terms of the financing could change, according to people with knowledge of the matter. Representatives for JPMorgan, Silver Lake, Qualtics and Press Ganey declined to comment. Banks have scored a number of big wins in recent weeks to finance large mergers and acquisitions. Debt-sales tied to M&A, which are more lucrative than repricing and refinancing deals, have been on the rise following a slump since the Federal Reserve’s 2022 rate-hike cycle. JPMorgan is also leading a $20 billion deal to finance the $55 billion take-private of Electronic Arts Inc., the biggest leveraged buyout of all time. That transaction has underwriters clamoring for a role to win some of the most attractive fees in investment banking. Elsewhere, a group of banks led by Goldman Sachs Group Inc., is wrapping up a $5.5 billion leveraged loan sale to help finance Thoma Bravo’s acquisition of human-resources software provider Dayforce Inc. JPMorgan is among a number of firms that have provided a debt commitment for the Qualtrics deal, according to a statement. Other banks on the deal are BMO Capital Markets Corp., Citigroup Inc., Deutsche Bank AG, Goldman Sachs, KKR Capital Markets, Mizuho Financial Group Inc., Morgan Stanley, RBC Capital Markets, UBS Group AG and Wells Fargo & Co.
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 Trillion 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?