JPMorgan Chase CEO Jamie Dimon testifies during a hearing of the Senate Committee on Banking, Housing and Urban Affairs titled “Annual Oversight of Wall Street Firms” at Hart Tower on December 6, 2023.
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Jamie Dimon, Senior CEO and Chairman JPMorganexpressing his belief that artificial intelligence will have a profound impact on society.
in his annual letter In a message to shareholders on Monday, Dimon chose artificial intelligence as the first theme of the latest issues facing the nation’s largest bank by assets – ahead of geopolitical risks, recent acquisitions and regulatory concerns.
“While we don’t know the full impact or the exact rate at which artificial intelligence will transform our business or how it will impact society as a whole, we have every confidence that the consequences will be extraordinary,” Dimon said.
Its impact will “potentially be as transformative as some of the major technological inventions of the past few hundred years: think of the printing press, the steam engine, electricity, computing and the Internet.”
Because Dimon is one of the most successful leaders in finance, his letters are widely circulated in the business community and cover a wide range of topics. The chief executive said he was concerned about continued inflationary pressures and reiterated his warning that the world may be entering the most geopolitically risky era since World War II.
But Dimon’s focus on artificial intelligence, first mentioned in his 2017 annual letter, stands out. The technology has been gaining traction since ChatGPT made waves in late 2022, producing human-sounding responses to queries.Enthusiasm for artificial intelligence fuels rapid rise of chipmakers Nvidia and help propel technology companies to new heights.
Dimon said JPMorgan Chase currently has more than 2,000 artificial intelligence and machine learning employees and data scientists working on 400 applications, including fraud detection, marketing and risk control. The bank is also exploring the use of generative AI in software engineering, customer service and ways to improve employee productivity, he said.
The technology could eventually reach the bank’s roughly 310,000 employees, helping some while displacing others and forcing the company to retrain workers for new roles.
“Over time, we expect the use of artificial intelligence to have the potential to add nearly all jobs and impact the composition of our workforce,” Dimon said. “It may eliminate certain job categories or roles, but it may also create others. category or role.”
The following is an excerpt from Dimon’s letter:
Inflation pressure:
“Many key economic indicators continue to be good today and are likely to improve, including inflation. But as we look toward tomorrow, conditions affecting the future should be considered… All of the following factors appear to be contributing to inflation: Continued fiscal spending “
On economic soft landing:
“By most measures, equity values are at the high end of the valuation range, and credit spreads are extremely tight. These markets appear to have priced in a 70% to 80% chance of a soft landing – modest growth, coupled with falling inflation. .and interest rates. I believe the likelihood is much lower than that.”
On interest rates and commercial real estate:
“If long-term interest rates rise above 6%, and that rise is accompanied by a recession, there will be a lot of stress — not just on the banking system, but on leveraged firms and other institutions. Remember, interest rates simply increase by 2 Most financial assets have essentially lost 20% in value, while some real estate assets, particularly office real estate, may be worth even less due to the effects of the recession and rising vacancy rates. Also remember, credit interest The gap tends to widen, sometimes dramatically, in a recession.”
On the disagreement between banks and supervisors:
“There is little real collaboration between practitioners – the banks – and regulators, who are often not practitioners in the commercial sector…Unfortunately, without collaboration and adequate analysis, it is difficult to trust that regulation can achieve the desired results Without having bad consequences. By constantly improving the system instead, we might make it worse.”
On rising geopolitical risks:
“Russia’s invasion of Ukraine and subsequent abhorrent attacks on Israel and the ongoing violence in the Middle East should puncture many assumptions about the future direction of safety and security, bringing us to this critical moment in history. The United States and the liberal Western world cannot afford not to To maintain a false sense of security based on the illusion that authoritarian regimes and repressive states will not use their economic and military power to advance their goals, especially against a West they view as weak, incompetent and disorganized Democracies. We remind everyone that national security is, and always will be, of paramount importance, even if its importance seems to wane in quieter times.”
On social media:
“A common sense and modest step for social media companies would be to give platform users further control over the content they see and how it is presented, leveraging existing tools and features – such as some of the alternatives offered today Feed algorithm settings. I believe many users (not just parents) would like to be able to manage their feeds more carefully; for example, prioritizing educational content for their children.”
Update on the First Republic deal:
“Acquiring a large company comes with a lot of complexities. People tend to focus on financial and economic results, and that’s a reasonable thing. In the case of First Republic, the numbers look pretty good. We recorded an accounting report on the acquisition It brought in $3 billion in revenue, and we told the world we expected revenue to grow by more than $500 million a year, and now we believe that number will be closer to $2 billion.”
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