BUSINESS

AI—according to Jamie Dimon—may have an impact on the economy comparable to that of electricity.

BY SIRAJ April -08-2024

Jamie Dimon is of the opinion that artificial intelligence will have a significant influence on the business world in the coming year.

In his annual shareholder letter, which was sent out on Monday, Dimon, who is widely regarded as one of the most important corporate leaders in the world, stated that although he does not yet know the entire effect that artificial intelligence will have on business, the economy, or society, he is aware that its influence will be considerable.

According to the letter that was written by the CEO of JPMorgan Chase (JPM), “We are completely convinced that the consequences will be extraordinary and possibly as transformative as some of the major technological inventions of the past several hundred years: Think of the printing press, the steam engine, electricity, computing, and the Internet, among others.”

As a result of the growth of artificial intelligence, workplaces all over the world have already been revolutionized, and the International Monetary Fund estimates that AI could potentially disrupt about forty percent of the world’s workforce. Its consequences have already been felt in a variety of industries, including medical, banking, and music.

We think that our use of artificial intelligence will, over the course of time, have the ability to enhance practically every job, as well as alter the composition of our workforce,” Dimon stated. There is a possibility that it would diminish specific job categories or functions, but it could also create new ones.

More than two thousand artificial intelligence and machine learning specialists are now part of the JPMorgan organization. Additionally, the bank has just announced the creation of a new job for a chief data and analytics officer who would be a member of their operating committee.

Additionally, Dimon was aware of the dangers that are associated with the AI surge. It is possible that you are already aware of the fact that there are malicious actors who are utilizing artificial intelligence in order to attempt to breach the systems of businesses in order to steal money and intellectual property or just to cause disruption and harm.

It was reported in January that JPMorgan had witnessed a significant increase in the number of daily attempts by hackers to access its networks over the course of the previous year. This statement brought to light the growing number of cybersecurity difficulties that the bank and other Wall Street corporations are currently facing.

Additionally, JPMorgan Chase, which is the largest bank in the United States in terms of assets, is currently investing $15 billion annually and employing 62,000 technologists in order to help strengthen its defenses against cyber crimes.

JPMorgan Chase’s CEO, AI could one day make almost every employment obsolete. Getty Images

Jamie Dimon Getty Images

We think that our use of artificial intelligence will, over the course of time, have the ability to enhance practically every job, as well as alter the composition of our workforce,” Dimon stated. There is a possibility that it would diminish specific job categories or functions, but it could also create new ones.

More than two thousand artificial intelligence and machine learning specialists are now part of the JPMorgan organization. Additionally, the bank has just announced the creation of a new job for a chief data and analytics officer who would be a member of their operating committee.

Additionally, Dimon was aware of the dangers that are associated with the AI surge. It is possible that you are already aware of the fact that there are malicious actors who are utilizing artificial intelligence in order to attempt to breach the systems of businesses in order to steal money and intellectual property or just to cause disruption and harm.

It was reported in January that JPMorgan had witnessed a significant increase in the number of daily attempts by hackers to access its networks over the course of the previous year. This statement brought to light the growing number of cybersecurity difficulties that the bank and other Wall Street corporations are currently facing.

Additionally, JPMorgan Chase, which is the largest bank in the United States in terms of assets, is currently investing $15 billion annually and employing 62,000 technologists in order to help strengthen its defenses against cyber crimes.

Acquiring the First Republic

Following the federal seizure of the San Francisco-based regional bank First Republic in May of last year, JPMorgan obtained the majority of its assets. The event was the second-largest failure of a bank in the United States.

Following the federal seizure of the San Francisco-based regional bank First Republic in May of last year, JPMorgan obtained the majority of its assets. The event was the second-largest failure of a bank in the United States.

Last spring, three US regional lenders went under, causing financial institutions and regulators to rush to stop the banking crisis from spreading. This fall was a part of that collapse.

Dimon stated on Monday that they believed the current financial crisis had passed when they bought First Republic in May 2023, after two other regional banks, Silicon Valley Bank (SVB) and Signature Bank, failed.

The “toxic combination” of excessive interest rate exposure, huge unrealized losses, and concentrated deposits was, in his opinion, unique to those three institutions. Although, he did caution that “there will be plenty of stress — not just in the banking system but with leveraged companies and others” in the event of a recession or a spike in interest rates.

Fears of inflation

Fears of inflation

“The United States may be entering one of the most treacherous geopolitical eras since World War II,” Dimon reiterated his earlier warning to investors.

He sees a lot of dangers, even while important economic statistics seem good and inflation rates are going down.

According to his analysis, there are several factors that could lead to inflation. These include continued government spending, global remilitarization, changes in global trade, the capital requirements of the green economy, and the possibility of future energy price increases caused by inadequate investment in energy infrastructure, despite the abundance of gas and spare capacity in oil.

A soft landing, in which inflation is reduced without causing an economic recession, is currently priced in at 70% to 80% by the markets. Dimon stated that those chances are excessively optimistic.

He claimed that traders are ignoring long-term geopolitical and policy risks in favor of following the Federal Reserve’s monthly maneuvers.

He expressed his concern about the excessive emphasis on monthly inflation data and small interest rate fluctuations.

Investors would be better served by considering the future a year or two out. His argument was that “many people feel” that “little changes in interest rates today may have less impact on inflation in the future than what really happened.

Dimon has been vocal about his concerns about the US debt ceiling, deficit spending, fiscal stimulus, and the consequences of quantitative tightening.

“These geopolitical and economic forces are having effects that are both large and somewhat unprecedented,” he stated. “Until they play out in their entirety over several years, they may not be fully understood.”

“The United States may be entering one of the most treacherous geopolitical eras since World War II,” Dimon reiterated his earlier warning to investors.

He sees a lot of dangers, even while important economic statistics seem good and inflation rates are going down.

According to his analysis, there are several factors that could lead to inflation. These include continued government spending, global remilitarization, changes in global trade, the capital requirements of the green economy, and the possibility of future energy price increases caused by inadequate investment in energy infrastructure, despite the abundance of gas and spare capacity in oil.

A soft landing, in which inflation is reduced without causing an economic recession, is currently priced in at 70% to 80% by the markets. Dimon stated that those chances are excessively optimistic.

He claimed that traders are ignoring long-term geopolitical and policy risks in favor of following the Federal Reserve’s monthly maneuvers.

He expressed his concern about the excessive emphasis on monthly inflation data and small interest rate fluctuations.

Investors would be better served by considering the future a year or two out. His argument was that “many people feel” that “little changes in interest rates today may have less impact on inflation in the future than what really happened.

Dimon has been vocal about his concerns about the US debt ceiling, deficit spending, fiscal stimulus, and the consequences of quantitative tightening.

“These geopolitical and economic forces are having effects that are both large and somewhat unprecedented,” he stated. “Until they play out in their entirety over several years, they may not be fully understood.”

Following First Republic’s demise, JPMorgan Chase will acquire the majority of its assets.

In an agreement announced early Monday, JPMorgan Chase will acquire the majority of First Republic Bank’s assets, safeguarding the money of First Republic’s clients following the nation’s second-largest bank failure ever.

The independent government body that guarantees bank deposits for customers, the Federal Deposit Insurance Corporation, had transferred First Republic’s insured and uninsured accounts to JPMorgan Chase, which had acquired “the substantial majority of assets” from First Republic.

“Our government invited us and others to step up, and we did,” expressed Jamie Dimon, CEO of JPMorgan Chase. According to him, the deal is beneficial for his bank’s shareholders as well, since it would increase the bank’s predicted earnings in the future.